Pound Drops Against Majors

The pound fell against its major counterparts in the New York session on Tuesday, as the U.S. dollar rebounded amid easing recession fears.

Better-than-expected ISM services report and comments from Federal Reserve officials helped ease concerns about a recession.

San Francisco Federal Reserve President Mary Daly said on Monday that policy easing will begin later this year, although the timing and the extent of reduction depend on the incoming information.

Chicago Fed President Austan Goolsbee told CNBC on Monday that the economy is not overheating and the central bank is prepared to respond if economic conditions deteriorate.

Survey results from S&P Global showed that the UK construction sector expanded at the fastest pace in more than two years in July as election-related slowdown proved to be temporary.

The headline S&P Global construction Purchasing Managers' Index rose unexpectedly to 55.3 in July from 52.2 in June. The reading was forecast to fall to 51.0.

The pound edged down to 1.0788 against the franc, 182.81 against the yen and 0.8613 against the euro, from its early highs of 1.0950, 187.10 and 0.8561, respectively. The currency is poised to challenge support around 1.06 against the franc, 178.00 against the yen and 0.88 against the euro.

The pound weakened to near a 5-week low of 1.2672 against the greenback. The currency is seen finding support around the 1.24 level.