Investing.com - The pound was hovering close to five-month lows against the U.S. dollar on Thursday, as a combination of concerns over the U.K. economic outlook and uncertainty over Britain’s future in the European Union weighed.
GBP/USD hit 1.5813 during European morning trade, the session low; the pair subsequently consolidated at 1.5833, dipping 0.07%.
Cable was likely to find support at 1.5801, Wednesday’s low and a five-month low and resistance at 1.5891, Wednesday’s high.
Sentiment on sterling remained weak after the International Monetary Fund cut Britain's growth forecast for this year and the next on Wednesday, adding to fears over the faltering U.K. recovery.
The IMF said that Britain’s economy would grow by 1% this year, 0.1% lower than in its October forecast and by 1.9% in 2014 , 0.3% less compared with October.
The IMF also trimmed its 2013 forecast for global growth to 3.5% from the 3.6% it projected in October, but said the global economy would expand by 4.1% in 2014 if the euro zone recovery continued.
Meanwhile, uncertainty over Britain’s future in the EU lingered after Prime Minister David Cameron pledged to hold a referendum on the issue before the end of 2017, amid growing political pressure for Britain to re-negotiate its relationship with Europe.
The pound was close to 10-month lows against the euro, with EUR/GBP up 0.15% to 0.8418.
Earlier Thursday, data from the euro zone showed that manufacturing activity in Germany and the wider euro zone improved in January, but indicated that France, the bloc’s second largest economy may be in a recession.
Germany’s manufacturing purchasing managers’ index rose to 48.8 from 46.0 in December, still below the 50 level that separates contraction from expansion.
Germany’s private sector expanded at the fastest pace in more than a year, with the services PMI rising to 55.3 for January, compared with 52.0 in December.
The euro zone manufacturing PMI rose to a 10-month high of 47.5 in January from a final reading of 46.1 in December, while the services PMI came in at 48.3 from 47.8 in December.
The French manufacturing PMI fell to a four-month low of 42.9 this month, while the services PMI came in at 43.6.
