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Forex - GBP/USD higher on U.S. data, Yellen remarks

Published 11/15/2013, 10:23 AM
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Investing.com - The pound was higher against the U.S. dollar on Friday, as disappointing U.S. economic reports coupled with growing expectations for the Federal Reserve to hold its stimulus program sent the greenback broadly lower.

GBP/USD hit 1.6134 during U.S. morning trade, the pair's highest since October 29; the pair subsequently consolidated at 1.6110, gaining 0.28%.

Cable was likely to find support at 1.5989, Thursday's low and resistance at 1.6208, the high of October 28.

In a report, the Federal Reserve of New York said its maufacturing activity index declined to minus 2.2 in November, from a reading of 1.5 the previous month, confounding expectations for a rise to 5.

A separate report showed that U.S. import prices fell 0.7% in October, compared to expectations for a 0.4% downtick, after a downwardly revised 0.1% rise the previous month.

In addition, official data showed that industrial production in the U.S. ticked down 0.1% in October, disappointing expectations for a 0.2% rise, after an upwardly revised 0.7% increase in September.

The data came after Fed Chair nominee Janet Yellen on Thursday defended the central bank's stimulus measures to bolster growth and called efforts to boost hiring an "imperative".

Answering questions before the Senate Banking Committee, Yellen said she would press forward with the central bank's ultra-easy monetary policy until officials were confident a durable economic recovery was in place that could sustain job creation.

The comments added to expectations that the Fed's monthly bond purchases may remained unchanged for an extended period of time.

Sterling was also higher against the euro with EUR/GBP slipping 0.17%, to hit 0.8362.

In the euro zone, official data earlier showed that consumer price inflation remained unchanged in October at an annualized rate of 0.7%, in line with expectations.

Core consumer price inflation, which excludes food, energy, alcohol, and tobacco, ticked down to 0.8% from a year earlier, from an upwardly revised rate of 1% in September, in line with market expectations.


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