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Forex - GBP/USD slips but remains near 27-month highs

Published 12/02/2013, 10:26 AM
Updated 12/02/2013, 10:26 AM
Investing.com - The pound slipped against the U.S. dollar on Monday, after upbeat U.S. data but still remained within close range of 27-month highs as data showed that activity in the U.K. manufacturing sector expanded at the fastest rate in 33 months in November.

GBP/USD hit 1.6343 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.6354, down 0.11%.

Cable was likely to find support at 1.6278, the low from November 28 and resistance at 1.6450.

In the U.S., the Institute of Supply Management said its manufacturing purchasing managers’ index rose to 57.3 in November from 56.4 in October, expanding at the fastest rate since April 2011. Analysts had expected the index to fall to 55.0.

The report said both production and new orders rose by around 3 points to 62.8 and 63.6 respectively. The employment component of the index indicated some improvement in the labor market in November, rising by more than 3 points to 56.5.

The pound strengthened earlier, after data showed that the U.K. manufacturing purchasing managers’ index rose to 58.4 last month, the highest level since February 2011, from an upwardly revised 56.5 in October.

Analysts had expected the manufacturing PMI to tick down to 56.0.

The new orders component of the index jumped to 64.6, the highest in almost 20 years, from 61.3 in October.

“The sector is on course to beat the 0.9% increase in output seen in the third quarter, with the quarterly pace of growth so far in the final quarter tracking comfortably above the 1.0% mark,” Rob Dobson, senior economist at survey compiler Markit, said.

Sterling was higher against the euro with EUR/GBP shedding 0.22%, to hit 0.8282.

In the euro zone, data on Monday showed that the bloc’s manufacturing PMI rose to a two year high of 51.6 last month from October's 51.3, slightly higher than a preliminary estimate of 51.5.

However, Spain’s manufacturing sector contracted for the first time since July last month, while the French manufacturing sector contracted for the 21st straight month.

The Spanish PMI fell to 48.6 from 50.9 in October, led lower by weaker orders and output.

The French index fell to 48.4 from 49.1 in October, the lowest level since June.


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