Forexpros – The pound slipped against the U.S. dollar on Tuesday, as the greenback regained ground lost after Monday’s better-than-forecast U.S. manufacturing data bolstered demand for riskier assets.
GBP/USD hit 1.5991 during European afternoon trade, the session low; the pair subsequently consolidated at 1.5989, shedding 0.21%.
Cable was likely to find support at 1.5946, Friday’s low and short-term resistance at 1.6062, Monday’s high and a four-and-a-half month high.
The pound remained supported after a report earlier showed that that activity in the U.K. construction sector expanded at the fastest rate in 21 months in March, fuelling hopes that the U.K. economy may avoid a recession.
The U.K. construction purchasing managers’ index rose to a seasonally adjusted 56.7 last month, up from a reading of 54.3 in February and better than expectations for a decline to 53.5.
The data came one day after a report showing that manufacturing activity in the U.K. expanded at the fastest rate in 10 months in March.
But concerns over the outlook for the euro zone weighed on risk appetite, after official data confirmed that the bloc’s economy contracted by 0.3% in the final three months of 2011, unchanged from a preliminary estimate. Annualized gross domestic product contracted by 0.7% in the fourth quarter.
Data on Monday showed that manufacturing activity in the euro zone remained in contraction territory for the eighth successive month in March, while a separate report showed that the bloc’s unemployment rate ticked up to a record high of 10.8% in February.
The pound was lower against the euro, with EUR/GBP rising 0.18% to hit 0.8326.
Later in the day, the U.S. was to release official data on factory orders, while the Federal Reserve was to release the minutes of its March policy meeting.
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