Investing.com - The pound traded higher against the dollar on Monday after industry data revealed the U.S. manufacturing sector produced slightly less goods than expected this month.
In U.S. trading on Monday, GBP/USD was trading at 1.6500, up 0.07%, up from a session low of 1.6466 and off a high of 1.6536.
Cable was likely to find support at 1.6383, the low from Feb. 10, and resistance at 1.6568, Thursday''s high.
Markit Economics reported earlier that its preliminary U.S. manufacturing purchasing managers’ index fell to 55.5 in March from a final reading of 57.1 in February. Analysts were expecting the index to dip to only 56.5 in March, and the report softened the greenback in quiet trading.
Losses were limited, however, as a reading above 50.0 indicates industry expansion while below indicates contraction.
The dollar rallied in recent sessions after Federal Reserve Chair Janet Yellen suggested to reporters last week that benchmark interest rates could rise sometime around the middle of 2015, though profit taking cooled the greenback on Monday in light of the soft Markit Economics report.
Elsewhere, sterling was down against the euro, with EUR/GBP up 0.25% at 0.8387, and up against the yen, with GBP/JPY up 0.04% at 168.71.
The euro came off earlier lows after bottom fishers snapped up nicely-priced positions in the currency and shrugged off soft German manufacturing data.
Markit Economics reported earlier that its preliminary reading of the euro area’s composite purchasing managers'' index ticked down to 53.2, only slightly lower than February’s 32-month highs of 53.3.
Still, the euro came under earlier pressure after data showed that the preliminary reading of Germany’s manufacturing purchasing managers'' index fell to a four-month low of 53.8 in march from a final reading of 54.8 in February, missing forecasts for a 54.6 reading.
The country’s services PMI declined to 54.0 from 55.9 last month, missing consensus forecasts for a 55.5 reading.
Better-than-expected data out of France brought in the bargain hunters and bolstered the single currency.
The French manufacturing PMI rose to 51.9 in March, from 49.7 last month, beating expectations for a 49.8 reading. France’s services PMI rose to a 26-month high of 51.4 from 47.2 in February, well above forecasts for a 47.5 reading.
Markets interpreted the French numbers as a sign that recovery in the euro area is gaining steam.
On Tuesday in the euro zone, Germany is to release the Ifo report on business climate.
The U.K. is to release data on consumer price inflation, which accounts for the majority of overall inflation. The nation is also to release private sector data on retail sales.