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Forex - GBP/USD slips lower after mixed U.K. data

Published 02/19/2016, 04:38 AM
Pound loses ground vs. dollar in cautious trade
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Investing.com - The pound slipped lower against the U.S. dollar on Friday, after the release of mixed economic reports from the U.K. and as investors continued to focus on discussions over Britain’s European Union membership

GBP/USD hit 1.4297 during European morning trade, the session low; the pair subsequently consolidated at 1.4304, shedding 0.23%.

Cable was likely to find support at 1.4233, Wednesday’s low and resistance at 1.4517, Tuesday’s high.

The U.K. Office for National Statistics said that retail sales rose 2.3% in January, beating expectations for a 0.8% gain. Retail sales declined by 1.4% in December, whose figure was revised from a previously estimated 1.0% fall.

Year-on-year, retail sales climbed 5.2% last month, exceeding expectations for a 3.6% rise.

Core retail sales, which exclude automobiles and fuel, increased by 2.3% in January, compared to expectations for an uptick of 0.7%. Core retail sales slipped 1.3% in December, whose figure was revised from a previously estimated 0.9% decline.

A separate report showed that U.K. public sector net borrowing declined by £11.81 billion in January, confounding expectations for a drop of £13.95 billion. Public sector net borrowing rose by £7.49 billion in December, whose figure was revised from a previously estimated increase of £6.87 billion.

Sentiment on the pound remained fragile as discussions were set to continue on Friday in Brussels regarding Britain's European Union membership.

U.K. Prime Minister David Cameron left talks with European Council president Donald Tusk and commission president Jean-Claude Juncker early Friday morning without any form of a deal.

Meanwhile, markets were also jittery as oil prices resumed their downward trend on Friday, a day after the Energy Information Administration said U.S. crude inventories rose by 2.1 million barrels last week, to a peak of 504.1 million barrels.

Separately, Iraq's oil minister said on Thursday that talks would continue between OPEC and non-OPEC members to find ways to restore "normal" oil prices following a meeting on Wednesday.

Sterling was steady against the euro, with EUR/GBP at 0.7750.

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