Forex - GBP/USD little changed after mixed U.S. data

Published 08/23/2012, 10:25 AM
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Investing.com - The pound was little changed against the U.S. dollar on Thursday, after the release of mixed U.S. data, while hopes that the Federal Reserve will soon turn to additional stimulus measures to boost growth continued to weigh on the greenback.

GBP/USD hit 1.5863 during U.S. morning trade, the daily low; the pair subsequently consolidated at 1.5873, easing 0.04%.

Cable was likely to find support at 1.5784, the low of May 17 and resistance at 1.5970, the high of April 17.

The U.S. Census Bureau said new home sales rose by 3.6% to a seasonally adjusted 372,000 units in July, beating expectations for a 2.6% increase to 365,000.

New home sales for June were revised up to 359,000 units from a previously reported 350,000.

Meanwhile, the U.S. Department of Labor said the number of people filing for initial jobless benefits last week rose by 4,000 to a seasonally adjusted 372,000, compared to expectations for a decline of 3,000 to 365,000.

The previous week’s figure was revised up to 368,000 from a previously reported 366,000.

Separately, preliminary data showed that manufacturing activity in the U.S. improved modestly in August, but still recorded the third lowest reading in the past 35 months.

Market research group Markit said that its preliminary manufacturing purchasing managers’ index rose to a seasonally adjusted 51.9 in August from a final reading of 51.4 in July. Analysts had expected the index to ease down to 51.3 in August.

The data came after the minutes of the Fed’s August meeting showed that many policymakers think additional easing may be warranted "fairly soon" unless there is evidence of a "substantial and sustainable" strengthening in the economic recovery.

Prospects for a third round of stimulus from the U.S. central bank overshadowed weak economic data out of the euro zone and China.

A report earlier showed that manufacturing activity in the euro zone rose more-than-expected in August, but remained in contraction territory for the 12th consecutive month, while service sector activity slumped to a two-month low.

A separate report showed that manufacturing activity in China slumped to a nine-month low in August, adding to concerns over a slowdown in the world’s second largest economy.

Elsewhere, the pound was lower against the euro with EUR/GBP adding 0.14%, to hit 0.7901.

Also Thursday, the British Banker's Association said that the number of new mortgages approved last month rose to 28.4K from 25.9K in June, compared to expectations for an increase to 28.2K.


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