Forexpros – The pound remained lower against the U.S. dollar on Wednesday, following data showing that the U.K. manufacturing sector contracted more-than-expected in July, while investors eyed the Federal Reserve’s rate statement later in the day.
GBP/USD hit 1.5620 during European afternoon trade, the pair’s lowest since July 26; the pair subsequently consolidated at 1.5630, shedding 0.30%.
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 BoE was to hold its monthly rate setting meeting on Thursday, but was not widely expected to announce any change to existing monetary policy.
Meanwhile, market participants were awaiting the conclusion of the Fed’s policy setting meeting, after U.S. data on Tuesday tempered expectations for another round of quantitative easing measures.
U.S. consumer confidence rose more than expected in July, while a separate report showed that manufacturing activity in the Chicago area expanded more than forecast.
The U.S. was to release data on non-farm employment change and manufacturing activity ahead of the Fed rate statement later in the session.
The pound was lower against the euro, with EUR/GBP rising 0.30% to 0.7872.
The euro remained supported by lingering optimism that the European Central Bank will unveil major steps to counter the debt crisis in the euro zone at its policy meeting on Thursday.
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