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Forex - GBP/USD jumps to 8-day high as Fed easing fears weigh

Published 10/28/2010, 11:24 AM
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Investing.com – The pound extended gains against the U.S. dollar on Thursday, jumping to hit an 8-day high as ongoing speculation over a Federal Reserve treasury purchase program weighed on the dollar.

GBP/USD hit 1.5978 during European late afternoon trade, the pair’s highest since October 18; the pair subsequently consolidated at 1.5965, soaring 1.24%.

Cable was likely to find support at 1.5690, the low of October 26 and resistance at 1.6106, the high of October 15 and an 8-month high.

The greenback came under pressure following a news report that the Federal Reserve Bank of New York surveyed primary dealers, asking them to estimate the effects of possible debt purchases by the central bank over a six-month period.

Earlier in the day, official data showed that the number of people who filed for unemployment assistance in the U.S. last week fell unexpectedly to the lowest level since July.

In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending October 23 fell to a seasonally adjusted 434K, after falling to a revised 455K in the preceding week. Analysts had expected initial jobless claims to remain unchanged last week.

The pound was also up against the euro, with EUR/GBP shedding 0.13% to hit 0.8721.

Also Thursday, industry data showed that U.K. retail sales fell more-than-expected in October. Separately, U.K. mortgage lender Nationwide said that its house price index fell more-than-expected in October.

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