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Forex - GBP/USD hits fresh daily low ahead of U.S. debt vote

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Forexpros - The pound extended losses against the U.S. dollar on Monday, falling to a fresh session low, amid uncertainty ahead of a vote to raise the U.S. debt ceiling and after data showed that U.S. manufacturing activity slowed sharply in July.

GBP/USD hit 1.6267 during U.S. morning trade, the daily low; the pair subsequently consolidated at 1.6281, tumbling 0.87%.

Cable was likely to find support at 1.6120, the low of July 21 and resistance at 1.6473, the day's high and a two-month high.

The pound weakened as investors remained worried about whether U.S. lawmakers would approve a plan to raise the USD14.3 trillion federal debt ceiling and avoid a default.

Meanwhile, concerns that the deal would not be sufficient to prevent ratings agencies from cutting the U.S. sovereign debt rating weighed.

Market sentiment was also hit after the U.S. Institute for Supply Management said its index of purchasing managers fell to 50.9 in July, compared to June's reading of 55.3. Analysts had expected the ISM PMI to decline to 54.8 in July.

On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.

Elsewhere, the pound was almost unchanged against the euro, with EUR/GBP inching up 0.01% to hit 0.8764.

Also Monday, a report showed that manufacturing activity in the U.K. shrank in July, contracting for the first time since July 2009.

The Markit/CIPS manufacturing purchasing managers' index fell to 49.1 in July from an upwardly revised 51.4 in June. Analysts' forecasts were for a figure of 51.1.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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