Forexpros — The pound extended losses against the U.S. dollar on Tuesday, falling to a fresh daily low after weaker-than-expected manufacturing data underlined concerns over the faltering U.K. economy.
GBP/USD hit 1.5613 during early European trade, the daily low; the pair subsequently consolidated at 1.5619, shedding 0.30%.
Cable was likely to find support at 1.5526, Monday’s low and resistance at 1.5688, Monday’s high and a seven-day high.
Earlier in the day, official data showed that manufacturing output in the U.K. grew at the slowest rate in 18 months in the year to August.
The Office for National Statistics said manufacturing production declined 0.3% in August, more than the expected 0. 2% fall, taking the annual rate of growth to 1.5%, the lowest reading since February 2010.
Industrial output rose 0.2% on the month, compared to forecasts for a 0.2% dip. On the year, output was still 1.0% lower.
The data came after the British Chamber of Commerce warned that the economy barely grew in the third quarter and said Britain’s government must take urgent steps to stop the economy from tipping back into recession.
Last week, the Bank of England announced that it was to restart its asset purchase program, in order to stimulate growth in the ailing U.K. economy.
Meanwhile, the pound was fractionally higher against the euro, with EUR/GBP dipping 0.03% to hit 0.8705.
Later in the day, Slovakia was to be the last country to vote on expanding the powers of the euro zone’s EUR440 billion bailout fund, the European Financial Stability Facility.
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