Forexpros – The pound slid against the U.S. dollar on Wednesday, as the previous day’s risk rally ran out of momentum amid concerns over the unresolved debt crisis in the euro zone, ahead of a German government debt auction later in the day.
GBP/USD hit 1.5628 during early European trade, the daily low; the pair subsequently consolidated at 1.5633, slipping 0.09%.
Cable was likely to find support at 1.5500, Tuesday’s low and resistance at 1.5728, the high of December 22.
The pound rallied to a one-week high against the greenback on Tuesday after data showed the U.S. manufacturing sector expanded at its fastest rate in six months in December, while U.S. construction activity accelerated to an almost one-and-a-half year high in November.
The upbeat data eased concerns that the financial crisis in Europe was creating a drag on global economic growth.
Also Tuesday, data showed that manufacturing activity in the U.K. improved in December, but remained in contraction territory for the third consecutive month.
Sterling was also lower against the euro, with EUR/GBP inching up 0.03% to hit 0.8342.
Later in the day, Germany was to auction EUR5 billion of government bonds, while the U.K. was to publish data on construction activity. Meanwhile, the U.S. was to release official data on factory orders.
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