Forex - GBP/USD little changed, close to 2-day low after U.K. GDP data

Published 08/24/2012, 05:03 AM
Updated 08/24/2012, 05:04 AM
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Investing.com - The pound was little changed against U.S. dollar on Friday, trading close to a two-day low after data showed that U.K. economic growth in the second quarter was revised up, although a contraction was confirmed, while sentiment remained under pressure amid global growth concerns.

GBP/USD hit 1.5825 during European morning trade, the pair's lowest since August 22; the pair subsequently consolidated at 1.5837, falling 0.14%.

Cable was likely to find support at 1.5769, the low of August 22 and resistance at 1.5913, Thursday's high.

The pound remained stable after revised data showed that the U.K. economy contracted less than initialy estimated in the second quarter, although the country remained in contraction territory for the third consecutive quarter.

The U.K. Office for National Statistics said that the country's gross domestic product fell by 0.5% in the second quarter, revised from the previously estimated 0.7% decline.

Construction output, which alongside record rainfall and the Queen’s Diamond Jubilee celebrations was particularly blamed for the U.K.'s deepening recession in the second quarter, was revised up to a 3.9% fall, from the previously estimated 5.2% drop.

Separately, preliminary data showed that business investiment in the U.K. declined unexpectedly in the second quarter, dropping 1.5% after a 1.9% rise in the previous quarter, disappointing expectations for a 2.8% increase.

Meanwhile, market participants eyed the release of U.S. economic data later in the day, as reports on Thursday painted a mixed picture of the country's economic recovery, prompting investors to temper expectations for a third round of quantitative easing by the Federal Reserve to boost growth.

Investors were also cautious after a string of disappointing manufacturing activity reports from the euro zone and China on Thursday sparked fresh concerns over a global economic slowdown.

Elsewhere, the pound was steady against the euro with EUR/GBP dipping 0.01%, to hit 0.7921.

Also Friday, investors were eyeing talks in the euro zone, after German Chancellor Angela Merkel said that she and French President Francois Hollande will maintain pressure on Greece to overhaul its economy at meetings with Prime Minister Antonis Samaras in Berlin, later Friday and on Saturday.

Later in the day, the U.S. was to release government data on durable goods orders.


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