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GBP/USD gains on U.K. economic growth data

Published 03/28/2014, 12:54 PM
Updated 03/28/2014, 01:00 PM
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Investing.com - Solid U.K. economic growth rates sent the pound firming against the dollar on Friday, though upbeat U.S. personal spending numbers supported the greenback and kept the pair steady.

In U.S. trading on Friday, GBP/USD was trading at 1.6634, up 0.14%, up from a session low of 1.6599 and off a high of 1.6651.

Cable was likely to find support at 1.6466, Monday's low, and resistance at 1.6597, Wednesday's high.

The pound firmed against the dollar after data showed that U.K. gross domestic product rose by 0.7% in the fourth quarter, in line with expectations.

A separate report showed that the U.K. current account deficit narrowed to £22.4 billion in the fourth quarter, from £22.8 billion in third quarter, whose figure was revised down from a previously estimated deficit of £20.7 billion.

Meanwhile in the U.S., the Commerce Department reported earlier that U.S. personal spending rose 0.3% in February, in line with expectations, Personal spending in January was revised down to a 0.2% gain from a previously estimated 0.4% increase.

A separate report showed that the core U.S. personal consumption expenditures price index remained unchanged at 0.1% last month, in line with expectations, which gave the dollar support.

Elsewhere the revised Thomson Reuters/University of Michigan consumer sentiment index ticked up to 80.0 in March from 79.9 the previous month. Analysts had expected the index to rise to 80.5 this month.

Still the dollar held steady, as the largely positive data came a day after economic reports showed that U.S. jobless claims fell to the lowest level since late November last week, while U.S. economic fourth quarter growth was revised higher.

Market sentiment remained firm that the Federal Reserve will continue winding down stimulus programs this year and begin raising benchmark interest rates from their current rock-bottom levels some time in 2015.

Elsewhere, sterling was up against the euro, with EUR/GBP down 0.10% at 0.8264, and up against the yen, with GBP/JPY up 0.85% at 171.17.

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