Investing.com - The pound erased losses against the U.S. dollar on Tuesday, boucing off a six-week low after revised data showed that the U.S. economy grew at a slower rate than initially estimated in the third quarter.
GBP/USD pulled back from 1.5581, the pair’s lowest since October 12 to hit 1.5654 during U.S. morning trade, rising 0.07%.
The pair was likely to find support at 1.5541, the low of October 12 and resistance at 1.5715, the high of September 29.
The U.S. Commerce Department’s second estimate gross domestic product showed that the economy grew at an annualized rate of 2% in the three months to September, down from a previous estimate of 2.5%.
Economists had expected the rate of growth to remain unchanged in the third quarter.
The report said the revision was due in large part to a USD8.5 billion decline in business inventories, which removed 1.55% from GDP growth. Inventories had previously been estimated to have increased by USD5.4 billion.
Earlier in the day, ratings agency Fitch said that the failure of a U.S. congressional committee to agree on a package of measures to slash the country’s deficit was likely to result in a revision of the U.S. rating outlook to ‘negative’, rather than a downgrade.
Meanwhile, sovereign debt concerns in the euro zone remained in focus after Spain’s Treasury sold EUR2.98 billion in three and six-month bonds in an auction which saw yields rise to 5.2% for the six-month bills, from 3.3% at a similar auction in October.
In the U.K., official data showed that public sector net borrowing fell more-than-expected in October, declining to GBP3.4 billion from GBP10.2 billion the previous month as growth in tax revenue outpaced spending.
Elsewhere, the pound was sharply lower against the euro with EUR/GBP rising 0.18%, to hit 0.8639.
Later in the day, the U.S. Federal Reserve was to publish the minutes of its November policy meeting, later Tuesday.
GBP/USD pulled back from 1.5581, the pair’s lowest since October 12 to hit 1.5654 during U.S. morning trade, rising 0.07%.
The pair was likely to find support at 1.5541, the low of October 12 and resistance at 1.5715, the high of September 29.
The U.S. Commerce Department’s second estimate gross domestic product showed that the economy grew at an annualized rate of 2% in the three months to September, down from a previous estimate of 2.5%.
Economists had expected the rate of growth to remain unchanged in the third quarter.
The report said the revision was due in large part to a USD8.5 billion decline in business inventories, which removed 1.55% from GDP growth. Inventories had previously been estimated to have increased by USD5.4 billion.
Earlier in the day, ratings agency Fitch said that the failure of a U.S. congressional committee to agree on a package of measures to slash the country’s deficit was likely to result in a revision of the U.S. rating outlook to ‘negative’, rather than a downgrade.
Meanwhile, sovereign debt concerns in the euro zone remained in focus after Spain’s Treasury sold EUR2.98 billion in three and six-month bonds in an auction which saw yields rise to 5.2% for the six-month bills, from 3.3% at a similar auction in October.
In the U.K., official data showed that public sector net borrowing fell more-than-expected in October, declining to GBP3.4 billion from GBP10.2 billion the previous month as growth in tax revenue outpaced spending.
Elsewhere, the pound was sharply lower against the euro with EUR/GBP rising 0.18%, to hit 0.8639.
Later in the day, the U.S. Federal Reserve was to publish the minutes of its November policy meeting, later Tuesday.