Forex - GBP/USD trims losses after U.S. pending home sales jump

Published 12/02/2010, 10:38 AM
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Investing.com – The pound trimmed losses against the U.S. dollar on Thursday, retreating from a 2-day low after data showed U.S. pending home sales jumped in unexpectedly in October.

GBP/USD clawed up from 1.5512, the pair’s lowest since Tuesday, to hit 1.5574 during European afternoon trade, shedding 0.29%.

Cable was likely to find support at 1.5483, Tuesday’s low and resistance at 1.5771, the high of November 26.

The U.S. National Association of Realtors said its pending home sales index surged by 10.4% in October. Analysts had expected the pending home sales index to decline by 0.9% in October.

NAR chief economist Lawrence Yun said, “The housing market clearly is in a recovery phase and will be uneven at times, but the improving job market and consequential boost to household formation will help the recovery process going into 2011”.

Meanwhile, a separate report showed that the number of people who filed for unemployment assistance in the U.S. last week rose more-than-expected.

Also Thursday, the European Central Bank extended special liquidity measures into 2011, easing pressure in euro zone debt markets. ECB President, Jean-Claude Trichet also said that the bank’s bond purchase program "is ongoing."

The pound was also down against the euro, with EUR/GBP rising 0.66% to hit 0.8465.

Earlier Thursday, data showed that the U.K. construction PMI rose unexpectedly in November, but remained close to an 8-month low and analysts said the sector was likely to make a much smaller contribution to economic growth in the final quarter than it did earlier in 2010.

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