The pound recorded only marginal gains against its main rivals on Tuesday (2 May), as a better-than-expected reading on the state of the manufacturing sector failed to spur traders into action.

Shortly after the halfway mark in the session, sterling was 0.22% and 0.13% higher against the dollar and the euro respectively, trading at $1.2913 and €1.1836.

"Although sterling could find itself supported in the short term, the upside may be limited, especially when considering how the toxic combination of accelerating prices and sterling weakness continues to impact consumers," said FXTM research analyst Lukman Otunuga.

"From a technical standpoint, sterling/dollar is bullish in the short term with the breakout above $1.2875 opening a path towards $1.3000. If bulls fail to conquer the $1.3000 level, then prices may descend back towards $1.2875 and $1.2775 respectively."

The pound's decline in the wake of the Brexit vote last June contributed to booming exports among manufacturing firms in April, according to a survey released by IHS Markit.

Britain's manufacturing sector grew at the fastest pace in three years last month, as the Markit's Purchasing Managers' Index (PMI) surged from 54.2 in March to 57.3 last month, compared with analysts' expectations for a 54 reading and marking the ninth consecutive month of expansion.

Fawad Razaqzada, market analyst at Forex.com, added: "With manufacturing PMI figures from both the UK and Eurozone showing growth, this has dampened worries that the impact of Brexit was beginning to bite."

However, he admitted PMI figures from the UK's construction and services sectors, due out later this week, could revive the worries again.

Elsewhere, the euro was broadly unchanged against the dollar, trading at $1.0905, while the latter struggled to make significant gains against the other major G10 currencies. The greenback rose 0.30% against the yen to ¥112.17 and gained 0.17% and 0.15% against its Canadian and Australian counterparts respectively, fetching CAD$1.3704 and AUD$1.3297.

However, the US currency was 0.23% lower against the Swiss franc, trading at CHF0.9940.

Analysts have suggested investors are unlikely to indulge in any major moves ahead of the Federal Reserve's two-day meeting, which kicks off later today.

"While a rate hike at the meeting tomorrow is all but priced out, the probability of one at the meeting in June is currently just shy of the 70% level that is widely seen as the threshold for such a move," said Oanda's senior market analyst Craig Erlam.

"Tomorrow's statement will therefore be very closely monitored in the absence of a press conference from chair Janet Yellen."