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Forex - GBP/USD hits fresh 2-week high on PMI data, poll

Published 04/01/2010, 07:54 AM
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Investing.com – Sterling hit a fresh 2-week high against the U.S. dollar on Thursday, on upbeat British manufacturing data and after an opinion poll diminished political uncertainty in the United Kingdom.

GBP/USD hit 1.525 during European midday trade, the pair's highest since March 19; cable subsequently consolidated around 1.5227, gaining 0.28%. The pair was likely to find resistance at 1.5382, the high of March 17, and support at 1.4781, the low of March 1.

Earlier in the day, an industry group, the Chartered Institute of Purchasing & Supply, said its survey of purchasing managers showed that British manufacturing activity grew in March at its fastest rate since October 1994.

Also Thursday, a Harris poll conducted for the Metro newspaper gave the opposition Conservative party a 10% lead over the ruling Labour party, quelling fears that Britain's upcoming election would be inconclusive.

Financial markets fear a minority or coalition government would not take strong action on Britain's ballooning budget deficit.

Meanwhile, sterling rose versus the euro and the yen: EUR/GBP shed 0.47% to hit 0.8856 and GBP/JPY jumped 0.53% to reach 142.67. The pound's rally came despite a warning from a senior executive at PIMCO, the world's largest bond fund, that Britain's sovereign debt rating could be downgraded within a year.

Later in the day, the U.S. Labor Department was set to publish an important weekly report on unemployment claims, and an industry group was due to publish a manufacturing purchasing managers' index for the country.

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