GBP/USD close to session lows

During Wednesdays trade the pound slipped to lower levels against the US dollar, as the disappointing Chinese manufacturing PMI report triggered safe haven demand for the greenback.

GBP/USD fell to a session low at 1.5334 at 10:20 GMT, after which consolidation followed at 1.5356. Support for the pair was expected at July 22nd low, 1.5256, while resistance was to be met at July 23rd high and also a one-month high, 1.5391.

Safe haven demand for the US dollar was boosted after an official report showed earlier on Wednesday that Chinese manufacturing activity dropped to an 11-month low during July. HSBC Holdings Plc and Markit Economics reported that the preliminary value of the Purchasing Managers’ Index in Chinese sector of manufacturing declined at a faster than expected rate to 47.7 in July, after showing a value of 48.2 a month ago. Experts had projected an increase to 48.6.

Meanwhile, industrial orders report, released from the United Kingdom, showed some shreds of optimism. According to the survey by the Confederation of British Industry (CBI) in July the indicator of industrial orders rose to -12, in line with preliminary estimates, from a reading of -18 in June. The indicator of export orders advanced to -20 in July from -22 during the preceding month. CBI experts suggested that optimism in the industrial sector has returned, while demand was expected to increase in the coming months, despite the fact that political and economic situation in the countries abroad may impose restrictions to future industrial orders from the United Kingdom. It is projected that these results may inflict positive influence upon economic growth during the second quarter of the year, as the preliminary value of British GDP will be announced on Thursday.

Elsewhere, the sterling was trading lower against the euro, as EUR/GBP cross increased by 0.29% to 0.8630 at 12:00 GMT. On the other hand, GBP/JPY pair rose by 0.53% for the day, trading at 153.67 at 12:02 GMT.