Forexpros – The pound pared losses against the U.S. dollar on Tuesday, after positive U.S. non-manufacturing data but sterling remained under pressure as concerns over Spain’s financial woes and the euro zone’s debt crisis continued to weigh.
GBP/USD pulled back from 1.5322, the pair’s lowest since June 1, to hit 1.5363 during U.S. morning trade, still down 0.13%.
Cable was likely to find support at 1.5267, the low of June 1 and a four-and-a-half-month low and resistance at 1.5436, the high of June 1.
Data showed that service sector activity in the U.S. grew at a slightly faster rate than expected in May, expanding for the 29th consecutive month.
The Institute of Supply Management said its non-manufacturing purchasing manager’s index inched up to 53.7 in May from a reading of 53.5 in April. Analysts had expected the index to remain unchanged in May.
But market sentiment remained vulnerable as a teleconference between finance ministers from the Group of Seven industrialized nations concluded without any clear signs of progress in tackling the ongoing sovereign-debt crisis in the euro zone.
The pound was hit earlier after Spain’s Treasury Minister Cristobal Montoro said that financial markets were effectively closed to Spain because of the current high level of the country’s borrowing costs.
In addition, revised data showed that the euro zone’s services sector contracted at a slightly slower rate than initially expected in May, but still shrank at the fastest pace since June 2009, while another report showed that retail sales in the bloc dropped 1% in April.
Official data also showed that German factory orders dropped 1.9% in April, compared to expectations for a 1% decline, fanning concerns over the impact of the ongoing sovereign debt crisis on the region’s largest economy.
Elsewhere, sterling was higher against the euro with EUR/GBP shedding 0.25%, to hit 0.8104.
Trade volumes remained thin on Tuesday, as markets in the U.K. were closed for the Queen’s jubilee.
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