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Forex - GBP/USD holds steady on hawkish Fed, BoE comments

Published 09/25/2014, 12:22 PM
Updated 09/25/2014, 12:24 PM
Hawkish Carney comments give pound support, though dollar holds on to gains
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Investing.com - The pound traded lower against the dollar on Thursday but held steady as hawkish comments out of the Bank of England gave the pair some support despite hawkish comments out of the Federal Reserve coupled with solid U.S. data.

In U.S. trading on Thursday, GBP/USD was down 0.23% at 1.6302, up from a session low of 1.6276 and off a high of 1.6343.

Cable was likely to find support at 1.6244, the low from Sept. 18, and resistance at 1.6418, Tuesday's high.

Bank of England Governor Mark Carney said earlier the time at which rate hikes kick in is "getting closer" but stressed a decision to tighten policy will depend on data and added the BOE does not have a pre-set course, words that cushioned the pound's losses against a firming dollar.

The U.S. Labor Department reported earlier that the number of individuals filing for initial jobless benefits in the week ending Sept. 20 rose by 12,000 to 293,000, up from the previous week's revised total of 281,000.

Analysts had expected jobless claims to rise by 19,000 to 300,000 last week, and the better-than-expected number drew applause for the greenback.

Separately, official data showed that U.S. durable goods orders dropped by 18.2% in August, after an increase of 22.5% in July, whose figure was revised down from a previously estimated gain of 22.6%. Analysts had expected durable goods orders to decline by 18.0% last month, and the in-line figure also gave the dollar room to firm.

Core durable goods orders, which are stripped of volatile transportation items, rose 0.7% last month, in line with expectations, after falling 0.5% in July, whose figure was revised from a previously estimated 0.7% drop.

The dollar saw added support after Dallas Federal Reserve President Richard Fisher, a known inflation hawk, said the U.S. central bank may start raising benchmark interest rates around the spring of 2015, earlier than many market expectations.

While the Fed has suggested its bond-buying program could close in October, uncertainty remains as to when rate hikes may begin in 2015.

Elsewhere, sterling was up against the euro, with EUR/GBP down 0.09% at 0.7815, and down against the yen, with GBP/JPY down 0.49% at 177.31.

On Friday, markets will move on U.S. gross domestic product and consumer-sentiment data as well as a report on German consumer climate.

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