Forexpros – The pound remained lower against the U.S. dollar on Tuesday, as fresh concerns over sovereign debt in the euro zone weighed and despite a better-than-expected reading of the U.K.’s construction PMI.
GBP/USD hit 1.6260 during European early afternoon trade, the daily low; the pair subsequently consolidated at 1.6273, slipping 0.13%.
Cable was likely to find short-term support at 1.6236, Monday’s low and a seven-day low and resistance at 1.6438, the high of July 27.
Italian and Spanish bond yields advanced to 14-year highs earlier, amid fresh worries that the sovereign debt crisis in the euro zone could spread to core economies in spite of the recent bailout deal for Greece.
In the U.K., a report showed that the construction industry eased slightly less-than-expected last month.
The Markit/CIPS construction purchasing managers’ index eased down to 53.5 in July from 53.6 the previous month, beating analysts’ expectations of a dip to 53.2.
The report said that while commercial construction and civil engineering posted growth on the month, residential construction shrank for a second month running.
Meanwhile, the outlook for global economic growth remained downbeat after data on Monday showed that the U.S. Institute for Supply Management’s Manufacturing Index fell to its lowest level in two years in July.
Elsewhere, the pound was higher against the euro, with EUR/GBP shedding 0.30% to hit 0.8717.
Later Tuesday, the U.S. Senate was due to hold a final vote on a measure to raise the U.S. debt ceiling by at least USD2.1 trillion and cut federal spending by as much as USD2.4 trillion.
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