Forex Pros – The pound erased gains against the U.S. dollar on Tuesday, following a report by Confederation of British Industry showing that manufacturing orders unexpectedly slumped this month.
GBP/USD retreated from 1.6532, the daily high, to hit 1.6486 during European early afternoon trade, slipping 0.07%.
Cable was likely to find support at 1.6384, the low of April 21 and resistance at 1.6597, the high of April 21 and a 16-month high.
The CBI said total orders in April fell to a balance of -11% from 5% in March. The quarterly survey, however, showed business optimism rising slightly to a balance of 9% compared with 7% in January, while domestic expected average prices rose to a balance of 36% from 31% in January, its highest reading since January 1990.
CBI Director General John Cridland said that the “manufacturing recovery remains firmly on track. Strong demand at home and abroad and rapid restocking over the past quarter have led to another solid rise in production, with growth expected to continue over the next quarter”.
The pound was also lower against the euro, with EUR/GBP climbing 0.25% to hit 0.8860.
Later in the day, the U.S. was to publish reports on house price inflation and consumer confidence, as well as official data on manufacturing activity in Richmond.
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