GBP/USD pulled back from 1.6473, the pair’s highest since June 6, to hit 1.6411 during European afternoon trade, slipping 0.08%.
Cable was likely to find support at 1.6293, the low of July 28 and resistance at 1.6546, the high of May 31.
The Markit/CIPS manufacturing purchasing managers’ index fell to 49.1 in July from an upwardly revised 51.4 in June, the first time it has been below the 50-level that separates contraction from expansion since July 2009, and the weakest reading since June of that year.
Analysts had expected the PMI to decline to 51.1 last month.
The weak data underlined expectations that the Bank of England would leave interest rates on hold at their record low of 0.5% well into 2012.
The pound remained supported amid expectations that the U.S. Senate would pass a deal to raise the USD14.3 trillion debt ceiling and avert a possible U.S. default in a vote later Monday.
The pound was also lower against the euro, with EUR/GBP rising 0.31% to hit 0.8790.
Also Monday, the U.S. Institute of Supply Management was to produce data on manufacturing activity.