Pound Sterling to US Dollar (GBP/USD) Exchange Rate falls as poor US data meets forecasts

The Pound fell below the 1.63 level for the first time in 2014 after a report showed that US factory Orders fell by 1.5% in December, matching economist forecasts.

According to the US Commerce Department, orders at US factories fell by 1.5% in December, the biggest decline seen since July. The cause of the decline was being blamed on a plunge in demand for new aircraft. Worryingly the data shows that the 1.5% gain seen in November was wiped out within the space of a month.

The ‘Greenback’ tried to push higher against the Pound as despite the decline it was less than economists had predicted. Economists had been expecting the data to show a fall of 1.7%. When transportation orders were excluded, new orders increased by 0.2%.

The US Dollar remains under pressure from Monday’s weak factory data and as result the currency softened against the Canadian Dollar. It also spent the session lower against the Australian Dollar. Against the Japanese Yen the ‘greenback’ hit a session high as a sell-off in emerging markets eased.

The Pound meanwhile managed to hold its gains against the Euro on Tuesday after after a report showed that construction activity in the UK picked up speed in January. The Markit/CIPS construction PMI jumped to 64.6 from the previous month’s figure of 62.1 and was the quickest expansion in construction activity since August 2007. The figure smashed economist forecasts for a reading of 61.5. Any figure above 50 indicates expansion.

Looking ahead to Wednesday and the most important piece of data that investors should be aware of is the latest ADP Employment change report which offers an early hint of how the US jobs market is performing.