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Forex - GBP/USD remains lower as Cyprus concerns weigh

Published 04/12/2013, 11:03 AM
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Investing.com - The pound remained lower against the U.S. dollar on Friday, after the release of weak U.S. economic reports, as concerns over the handling of Cyprus's financial bailout continued to dampen market sentiment.

GBP/USD hit 1.5345 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.5369, slipping 0.11%.

Cable was likely to find support at 1.5250, the low of April 9 and resistance at 1.5451, the high of February 20.

The University of Michigan said its index of consumer sentiment declined far more-than-expected in April, falling to 72.3 from a reading of 78.6 the previous month. Analysts had expected the index to tick down to 78.5 this month.

The report came after official data showed that retail sales in the U.S. fell 0.4% in March, disappointing expectations for a 0.1% rise, after a 1% increase the previous month.

Core retail sales, which exclude automobiles also slipped 0.4% last month, after a 1% increase in February, compared to expectations for a 0.1% rise.

A separate report showed that U.S. producer price inflation, including food and energy, ticked down 0.6% in March, more than the expected 0.2% slip, after a 0.7% gain the previous month.

Core producer price inflation rose 0.2% last month, in line with expectations, following a 0.2% increase in February.

Meanwhile, sentiment remained under pressure as the Eurogroup of finance ministers was meeting in Dublin to discuss Cyprus, after the country's government confirmed on Thursday that the cost of its bailout has risen to EUR23 billion EUR17.5 billion.

Euro zone finance ministers were also expected to discuss whether to give Ireland and Portugal an extension on their bailout loan repayments.

Sterling was fractionally lower against the euro with EUR/GBP adding 0.09%, to hit 0.8522.

Investors were also eyeing an upcoming speech by Federal Reserve Chairman Ben Bernanke for indications of the future possible direction of monetary policy.


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