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Forex - GBP/USD slips lower, remains in tight trading range

Published 10/11/2013, 10:19 AM
GBP/USD
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EUR/GBP
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Investing.com - The pound slipped lower against the U.S. dollar on Friday, but remained within a tight trading range as investors awaited the outcome of U.S. budget negotiations with hopes they would avoid the country a sovereign default.

GBP/USD hit 1.5946 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.5946, edging down 0.13%.

Cable was likely to find support at 1.5776, the low of September 13 and resistance at 1.6088, the high of September 25.

Hopes for progress on the U.S. budget front remained after Republicans on Thursday offered to extend the government's borrowing authority for several weeks, temporarily putting off a default, while Obama was pushing to also reopen government operations that have been closed since October 1.

No deal emerged after a 90-minute meeting between President Barack Obama and Republican leaders, but talks continued into the night.

U.S. Treasury Secretary Jack Lew reiterated Thursday that the U.S. will reach its debt ceiling on October 17 and warned that the political crisis is starting to hurt the economy. The comments came during testimony to the Senate finance committee.

Markets shrugged off a preliminary report by the University of Michigan showing that its consumer sentiment index for October fell to 75.2, from a reading of 77.5 in September, confounding expectations for a downtick to 76.0.

The University of Michigan also said inflation expectations for this month declined to 2.9%, from 3.3% in September.

Sterling was lower against the euro with EUR/GBP gaining 0.37%, to hit 0.8499.


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