Sterling dipped slightly on Wednesday after disappointing UK factory data, but remained within sight of a six-week high versus a weak dollar and looked set to retain support in the absence of a deal to raise the US debt ceiling. The pound was down 0.2 percent on the day at $1.6380, off a high of $1.6440 hit in earlier trade, after a Confederation of British Industry survey's total order book balance fell to -10 this month from +1 in June, well below forecasts for a reading of 2.
Traders cited selling by UK retail and corporate names, but analysts said that despite the weak data cable was likely to hold above support around the technical pivot point at $1.6370 thanks to broad dollar weakness. The political wrangling has pushed the dollar down against major currencies, although market players said technical charts indicated sterling/dollar looked "toppy" above $1.6400 and was unlikely to close above $1.6470.
Traders cited offers in the $1.6450-70 region while strong support was seen at $1.6370. Further support below that level was at Monday's low of $1.6262. The euro slipped 0.3 percent against sterling to 88.15 pence, but downside support was seen around 87.92 pence, the 61.8 percent retracement of the late May to early July rally.
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