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Forex - GBP/USD trims losses but Syria concerns still weigh

Published 08/27/2013, 10:30 AM
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Investing.com - The pound trimmed losses against the U.S. dollar on Tuesday, but remained under pressure as fears of a possible U.S. military strike on Syria continued to weigh on demand for risk-related assets, while upbeat U.S. data lent support to the greenback.

GBP/USD pulled away from 1.5482, the pair's lowest since August 14, to hit 1.5527 during U.S. morning trade, still down 0.30%.

Cable was likely to find support at 1.5423, the low of August 14 and resistance at 1.5612, Monday's high.

Data showed that U.S. consumer confidence rose more-than-expected in August, hitting the highest level since January 2008.

The Conference Board said its index of consumer confidence rose to 81.5 in August from an upwardly revised 81.0 in July. Analysts had expected the index to fall to 79.0.

The data eased uncertainty over the timing of a reduction in Federal Reserve stimulus measures after recent weak data releases raised doubts over the strength of the U.S. economic recovery.

Meanwhile, market sentiment remained under pressure as expectations for a military strike against Syria grew after U.S. Defense Secretary Chuck Hagel said American forces are "ready" to launch strikes if President Obama chooses to order an attack.

Earlier Tuesday, U.S. Secretary of State John Kerry said there was “undeniable” proof that the government had used chemical weapons against civilians.

Sterling was lower against the euro with EUR/GBP gaining 0.40%, to hit 0.8618.

Also Tuesday, a report showed that the Ifo index of German business climate rose to a 16-month high of 107.5 in August from 106.2 in July. Economists had expected the index to tick up to 107.0.

The Current Assessment Index rose to 112.0 in August from 110.1 in July, compared to expectations for an increase to 110.9.


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