Investing.com - The pound was steady on Tuesday following CBI industrial trends orders showing the fastest quarterly factory output in 22 years.
Sterling held above the 1.30 mark on the weakened dollar. At 10:05 GMT, GBP/USD slipped just 0.8% to 1.3018.
The Confederation of British Industry (CBI) released the most recent industrial trends orders for the three months to July. With a reading of 10, it slowed a little more than expected. The report from the CBI, a confederation of the biggest manufacturing companies in the UK, showed that manufacturing rose 31 pts in the three months to July, up from 22 pts in the three months to April. It was the highest reading since 1995.
The UK Treasury Gilt Auction for July data released by the UK Debt Management Office released an average rate on 30 year yields of 1.827%. The rate for June was 1.671%.
Sterling largely shrugged off the International Monetary Fund’s downgrade of the UK’s GDP on Monday. The IMF revised growth to 1.7%, citing a weak start to the year.
The US dollar index, the trade-weighted basket of six major currencies, was at 93.80 on Tuesday, not far from Monday’s low of 93.65, its weakest level for 13 months.
The dollar has been weakened due to domestic issues this past week. Allegations of collusion with Russia during the election campaign do not seem to be disappearing, while the failure to pass the healthcare reform bill has called into question the ability of the administration to pass laws on tax reforms.
The dollar is under pressure ahead of the Federal Reserve meeting which concludes on Wednesday. There will be no press conference, however investors will look to the FOMC statement released on Wednesday evening for any indication of a third rate hike before the end of the year.
German Ifo business climate index was higher than forecast with a reading of 116.0, lifting the strong single currency higher. EUR/GBP was 0.8943, up 0.07%.
Sterling performed positively against safe haven currencies. GBP/JPY was up 0.21% at 147.07, while GBP/CHF was up 0.05% at 1.2336.
The pound was up 0.15% on the New Zealand dollar, GBP/NZD was 1.7540 on Tuesday morning. The Aussie continued its rally from the Reserve Bank of Australia's hawkish meeting minutes last week, GBP/AUD was down 0.08% at 1.6429.
GBP/CAD was stable at 1.6292, the pound was down just 0.02%.
Investors will be holding out to see the UK Q2 GDP reading released on Wednesday with hopes that the economy has recovered from its weak Q1. Hawkish Bank of England policymaker Andy Haldane will also speak this evening.