Investing.com - The pound strengthened against the dollar on Tuesday after weak U.S. consumer confidence data stoked ongoing expectations for the Federal Reserve to keep its dollar-weakening monetary stimulus programs in place through early 2014.
Stimulus tools such as the Fed's USD85 billion in monthly bond purchases aim to drive recovery by pushing down long-term interest rates, weakening the dollar as long as they remain in effect.
In U.S. trading on Tuesday, GBP/USD was trading at 1.6217, up 0.38%, up from a session low of 1.6139 and off from a high of 1.6218.
Cable was likely to find support at 1.6134, Monday's low, and resistance at 1.6240, the high from Nov. 24.
The Conference Board reported earlier that its index of U.S. consumer confidence declined to 70.4 in November from 72.4 in October.
Analysts were expecting the index to rise to 72.9 this month, and the disappointing reading weakened demand for the dollar by keeping expectations alive for the Fed to hold off on scaling back monthly bond purchases until early 2014, likely in March, when Fed Chair nominee Janet Yellen holds her first policy meeting as head of the U.S. central bank.
The news offset official data revealing that the number of building permits issued in the U.S. rose to the highest level since January 2008 in October.
The Commerce Department reported earlier that the number of building permits issued rose 6.2% to a seasonally adjusted 1.034 million units from September’s total of 970,000. Analysts expected building permits to decline to 940,000 units in October.
Elsewhere in the U.S. housing sector, The Standard & Poor's/Case-Shiller 20-city home price index rose 0.7% in September from August and 13.3% on year in September.
The monthly increase met expectations, though September's on-year gain, the fastest since February of 2006, beat consensus forecasts for a 13.0% reading.
Meanwhile across the Atlantic, Bank of England Governor Mark Carney reiterated that the bank’s 7% target for unemployment was still a threshold at which the bank would consider raising interest rates.
"The exact timing of when that 7% threshold will be achieved is subject to uncertainty. We do our best to give our estimates of that uncertainty... One month's unemployment figures does not have a material change on those likelihoods," he said.
The comments came during testimony on the BoE’s quarterly inflation report before parliament’s Treasury committee.
On the economy, Carney said that "all the elements" were in place for a pick-up in activity, which gave the pound support.
The pound, meanwhile, was down against the euro and down against the yen, with EUR/GBP up 0.04% at 0.8371 and GBP/JPY down 0.07% at 164.16.
On Wednesday, the U.K. is to release revised data on third quarter economic growth, as well as preliminary data on business investment.
The U.S. is to release data on durable goods orders, a report on manufacturing activity in the Chicago region and revised data on consumer sentiment.
The Labor Department is to release the weekly report on initial jobless claims one day ahead of schedule due to Thursday’s Thanksgiving holiday.
Stimulus tools such as the Fed's USD85 billion in monthly bond purchases aim to drive recovery by pushing down long-term interest rates, weakening the dollar as long as they remain in effect.
In U.S. trading on Tuesday, GBP/USD was trading at 1.6217, up 0.38%, up from a session low of 1.6139 and off from a high of 1.6218.
Cable was likely to find support at 1.6134, Monday's low, and resistance at 1.6240, the high from Nov. 24.
The Conference Board reported earlier that its index of U.S. consumer confidence declined to 70.4 in November from 72.4 in October.
Analysts were expecting the index to rise to 72.9 this month, and the disappointing reading weakened demand for the dollar by keeping expectations alive for the Fed to hold off on scaling back monthly bond purchases until early 2014, likely in March, when Fed Chair nominee Janet Yellen holds her first policy meeting as head of the U.S. central bank.
The news offset official data revealing that the number of building permits issued in the U.S. rose to the highest level since January 2008 in October.
The Commerce Department reported earlier that the number of building permits issued rose 6.2% to a seasonally adjusted 1.034 million units from September’s total of 970,000. Analysts expected building permits to decline to 940,000 units in October.
Elsewhere in the U.S. housing sector, The Standard & Poor's/Case-Shiller 20-city home price index rose 0.7% in September from August and 13.3% on year in September.
The monthly increase met expectations, though September's on-year gain, the fastest since February of 2006, beat consensus forecasts for a 13.0% reading.
Meanwhile across the Atlantic, Bank of England Governor Mark Carney reiterated that the bank’s 7% target for unemployment was still a threshold at which the bank would consider raising interest rates.
"The exact timing of when that 7% threshold will be achieved is subject to uncertainty. We do our best to give our estimates of that uncertainty... One month's unemployment figures does not have a material change on those likelihoods," he said.
The comments came during testimony on the BoE’s quarterly inflation report before parliament’s Treasury committee.
On the economy, Carney said that "all the elements" were in place for a pick-up in activity, which gave the pound support.
The pound, meanwhile, was down against the euro and down against the yen, with EUR/GBP up 0.04% at 0.8371 and GBP/JPY down 0.07% at 164.16.
On Wednesday, the U.K. is to release revised data on third quarter economic growth, as well as preliminary data on business investment.
The U.S. is to release data on durable goods orders, a report on manufacturing activity in the Chicago region and revised data on consumer sentiment.
The Labor Department is to release the weekly report on initial jobless claims one day ahead of schedule due to Thursday’s Thanksgiving holiday.