Investing.com - The pound fell to the day’s lows against the dollar on Monday after data showing that UK manufacturing growth slowed to its weakest level in three months in June.
GBP/USD touched a low of 1.2962 and was at 1.2971 by 09.37 GMT (05.37 ET), off 0.42% for the day.
Sterling had risen as high as $1.3029 on Friday; it’s strongest level since May 23.
Data firm Markit said its manufacturing purchasing managers' index fell to 54.3 from a downwardly revised 56.3 in May, a three-month low and below economists’ forecasts for a reading of 56.5.
Production and new orders grew in June, but at a slower rate than in the previous month. The report also noted that demand from domestic and export markets both slowed, dimming optimism that the weaker pound would make exports more competitive.
The data also dampened hopes that the economy is rebounding after it grew by just 0.2% in the first quarter.
“While the survey data add to signs that the economy is likely to have shown stronger growth in the second quarter, further doubts are raised as to whether this performance can be sustained into the second half of the year," said Rob Dobson, senior economist at Markit.
The rate of economic growth slowed sharply in the first quarter as consumers were hit by slowing wage growth and accelerating inflation due to the steep drop in sterling.
The pound was little changed against the euro, with EUR/GBP last at 0.8772.
In the euro zone, data on Monday showed that factory activity grew at the fastest rate in six years last month, driven by a strong pick-up in new orders.
Another report showed that the jobless rate in the euro area was 9.3% in May, matching April’s figure and the lowest since March 2009.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.41% to 95.78, after falling a nine-month trough of 95.22 on Friday.
The dollar regained ground after falling last week amid expectations that several global central banks are getting ready to join the Federal Reserve in tightening monetary policy.
In comments last week the heads of the European Central Bank, the Bank of England and the Bank of Canada adopted a more hawkish view on monetary policy.
Hawkish signals from foreign central banks contrasted with doubts over whether the Fed will be able to hike rates again this year given a recent batch of weak U.S. economic data and growing skepticism that the Trump administration will be able to deliver on its pro-growth agenda.