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Forex - GBP/USD remains higher after mixed U.S. reports

Published 05/30/2014, 10:19 AM
Pound holds gains vs. dollar, but upside seen limited
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EUR/GBP
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Investing.com - The pound remained higher against the U.S. dollar on Friday, as the release of mixed U.S. economic reports did little to support demand for the greenback, altough concerns over the U.K. housing sector capped sterling's gains.

GBP/USD hit 1.6762 during U.S. morning trade, the pair's highest since Wednesday; the pair subsequently consolidated at 1.6753, rising 0.22%.

Cable was likely to find support at 1.6693, Thursday's low and resistance at 1.6816, Wednesday's high.

In a revised report, the University of Michigan said its consumer sentiment index ticked up to 81.9 this month, from a reading of 81.8 in April. Analysts had expected the index to rise to 82.5 in May.

Separately, data showed that the Chicago purchasing managers' index rose to a seven-month high of 65.5 in May, from 63.0 in March, confounding expectations for a fall to 61.0.

The report came after data showed that personal spending in the U.S. fell 0.1% last month, compared to expectations for a 0.2% rise, after a 1% increase in March, whose figure was revised from a previously estimated 0.9% gain.

U.S. core ersonal consumption expenditures, which exclude food and energy, rose 0.2% in April, in line with expectations, after a 0.2% increase the previous month.

Meanwhile, sentiment on the pound remained vulnerable after a report by the British Bankers' Association earlier in the week showed that banks approved the lowest number of mortgages in eight months in April.

The data added to indications that the U.K. housing market is starting to slow, prompting investors to trim back expectations for a rate hike by the Bank of England later this year.

Sterling was fractionally higher against the euro, with EUR/GBP easing 0.07% to 0.8131.

In the euro zone, official data earlier showed that German retail sales fell 0.9% last month, confounding expectations for a 0.4% rise, after a 0.1% uptick in April, whose figure was revised from a previously estimated 0.7% fall.

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