Forexpros – The pound fell to a session low against the U.S. dollar on Wednesday, after data showed that manufacturing activity in the U.K. fell at the fastest pace in more than three years in July.
GBP/USD hit 1.5620 during European morning trade, the pair’s lowest since July 26; the pair subsequently consolidated at 1.5652, shedding 0.18%.
Cable was likely to find support at 1.5469, the low of July 26 and resistance at 1.5689, the session high.
The Markit/CIPS U.K. manufacturing purchasing managers’ index dropped to 45.4 in July, the lowest level since March 2009, from a downwardly revised 48.4 in June and well below forecasts for a reading of 48.7.
The report said that output and new orders both contracted sharply amid weaker domestic and export demand. However, the report also said the employment index showed the first growth since April.
The weak data fuelled expectations for more monetary easing by the Bank of England in the coming months, after data last week showed that the U.K. economy contracted in the three months to June, extending the recession into a third quarter.
Earlier Wednesday, a report showed that U.K. house prices fell at the fastest annual rate in almost three years in July.
Mortgage lender Nationwide said house prices fell 0.7% in July and were down 2.6% year-over-year, the biggest annual decline since August 2009.
The pound remained supported amid expectations for Federal Reserve and the European Central Bank to ease monetary policy this week, in an attempt to spur economic growth in the U.S. and stem the long running debt crisis in the euro zone.
The BoE was to hold its monthly rate setting meeting on Thursday, but was not widely expected to announce any change to existing monetary policy.
Sterling was lower against the euro, with EUR/GBP up 0.26% to 0.7869.
Later Wednesday, the Federal Reserve was to announce its benchmark interest rate and release its keenly anticipated rate statement. The U.S. was also to release data on non-farm employment change, while the Institute for Supply Management was to produce a report on manufacturing activity.
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