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Forex - GBP/USD pushes higher but gains capped

Published 05/16/2014, 10:21 AM
Pound rises against dollar, upside seen limited
GBP/USD
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EUR/GBP
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Investing.com - The pound pushed higher against the U.S. dollar on Friday, after the release of disappointing U.S. consumer sentiment data, but gains were expected to remain capped by the Bank of England's latest growth forecasts.

GBP/USD hit 1.6841 during U.S. morning trade, the pair's highest since May 14; the pair subsequently consolidated at 1.6832, rising 0.24%.

Cable was likely to find support at 1.6733, Thursday's low and resistance at 1.6902, the high of May 12.

In a preliminary report, the University of Michigan said its consumer sentiment index fell to 81.8 in May, from a reading of 84.1 the previous month, compared to expectations for a rise to 84.5.

Earlier Friday, official data showed that U.S. building permits rose 8% to 1.080 million units last month, from an upwardly revised 1.000 million in March. Analysts had expected building permits to rise to 1.010 million units in April.

The report also showed that building starts rose to 1.072 million units in April, from 0.947 million in March, whose figure was revised up from a previously estimated 0.946 million. Analysts had expected building starts to rise to 0.980 million units last month.

Meanwhile, the pound remained under pressure after the BoE on Wednesday left its forecasts for growth and inflation largely unchanged in its quarterly Inflation Report and indicated that it is still in no rush to hike interest rates.

The BoE said it now expects economic growth of 2.9% in 2015, up from 2.7% in its February report, and said the rate of growth this year would remain unchanged at 3.4%.

Sterling was higher against the euro, with EUR/GBP sliding 0.24% to 0.8146.

Investors also continued to monitor developments in Ukraine as U.S. Secretary of State John Kerry warned Russia it faced broader economic and industrial sanctions if it meddled in Ukraine's presidential elections on May 25.

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