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Forex - GBP/USD drops as U.K. economy contracts

Published 08/24/2012, 02:18 PM
Updated 08/24/2012, 02:19 PM
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Investing.com - The pound on Friday weakened against the dollar on news the U.K. economy contracted during the second quarter albeit less than expected.

Solid durable goods orders out of the U.S. sent the dollar gaining as well in choppy trading.

In U.S. trading on Friday, GBP/USD hit 1.5826, down 0.21%, up from a session low of 1.5807 and off from a high of 1.5869.

The pair was likely to find support at 1.5807, the earlier low, and resistance at 1.5869, the earlier high.

The U.K. gross domestic product contracted 0.5% in the second quarter, less than market forecasts for a 0.6% contraction and an improvement from an original estimate of a 0.8% decline in output.

Still, the news sent the pound weakening against the greenback, as bullish news broke in the U.S.

The Census Bureau reported earlier that U.S. durable goods orders rose to 4.2% in July from 1.6% in June, whose figure was revised up from 1.3%.

Analysts had expected durable goods orders to rise 2.4% last month.

The pound, meanwhile, was up slightly against the euro and down slightly against the yen, with EUR/GBP trading down 0.01% at 0.7922 and GBP/JPY down 0.01% at 124.47.








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