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Forex - GBP/USD erases losses, surges to fresh daily high

Published 12/08/2010, 06:56 AM
GBP/USD
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EUR/GBP
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Investing.com – The pound erased losses against the U.S. dollar on Wednesday, rebounding from a 2-day low after data showed that U.K. industrial orders rose to a two year high in December.

GBP/USD clawed up from 1.5669, the pair’s lowest since Monday, to hit 1.5790 during European morning trade, gaining 0.20%.

Cable was likely to find support at 1.5580, the low of December 3 and resistance at 1.5964, the high of November 23.

Earlier in the day, the Confederation of British Industry said its index of industrial order expectations rose to -3.0 in December, after rising to -15.0 in November. Analysts had expected the index to rise to -12.0 in December.

On the index, a reading above 0.0 indicates increasing order volume is expected, below indicates expectations are for lower volume.

CBI Chief Economic Adviser Ian McCafferty said, “These figures show that the recovery in the manufacturing sector is well underway.”

The pound was also up against the euro, with EUR/GBP shedding 0.33% to hit 0.8387.

Elsewhere, the British Retail Consortium late Tuesday said U.K. shop price inflation remained extremely subdued in November, rising by just 0.1% on the month and rising 2.0% on the year.

The data bolstered the case made by senior Bank of England policymakers that inflation is being driven by one-off effects, such as VAT, energy prices and pound weakness.

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