Forex - GBP/USD dips after U.S. data, BOE

Published 01/12/2012, 10:43 AM
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Investing.com - The pound was slightly lower against the U.S. dollar on Thursday, after weaker than expected U.S. economic data weighed on demand for riskier assets.

GBP/USD hit 1.5368 during U.S. morning trade, the daily high; the pair subsequently consolidated at 1.5319, inching down 0.07%.

Cable was likely to find support at 1.5277, the day’s low and a three-month low and resistance at 1.5469, the high of January 9.

In the U.S., the Department of Labor said earlier that the number of individuals filing for initial jobless benefits in the week ending January 7 rose to 399,000 from 375,000 the previous week.

A separate report showed that U.S. retail sales rose less-than-expected in December, ticking up 0.1%, while core retail sales declined unexpectedly.

The data came after the Bank of England held its benchmark interest rate at a record-low 0.50%, where it’s stood since March 2009, in a widely expected move.

The bank also kept the stock of asset purchases financed by the issuance of central bank reserves at GBP275 billion.

Earlier Thursday, official data showed that manufacturing production in the U.K. fell unexpectedly in November, while industrial production also declined unexpectedly.

Elsewhere, European Central Bank President Mario Draghi said the ECB saw "tentative signs of stabilization of activity at low levels" although the economy still faced "substantial downside risks."

Draghi also said the central bank’s recent refinancing operation has made a substantial contribution to improving the funding situation for banks in the euro zone and averting a liquidity crunch.

The comments came after the ECB left its benchmark interest rate unchanged at 1% earlier.

Elsewhere, the pound was sharply lower against the euro with EUR/GBP climbing 0.80%, to hit 0.8355.

Also Thursday, a report by the National Institute of Economic and Social Research estimated that the U.K.’s economy grew by 0.1% in the three months ending in December, after a 0.3% increase in the three months ending in November.


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