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Forex - GBP/USD trims losses as Chinese data boosts risk appetite

Published 01/20/2011, 04:11 AM
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Investing.com – The pound trimmed losses against the U.S. dollar on Thursday, as strong Chinese economic data boosted risk appetite, despite earlier concerns that the data would prompt Beijing to step up its monetary tightening policy.

GBP/USD clawed back up from 1.591, the pair’s lowest since Tuesday, to hit 1.5971 during European morning trade, slipping 0.15%.

The pair was likely to find support at 1.591, the days low and resistance at 1.6058, Tuesday’s high and an eight week high.

Earlier in the day, official data showed that China's gross domestic product expanded 9.8% in the fourth quarter from a year earlier, faster than the third quarter's 9.6% increase.

The consumer price index rose 4.6% in December, down from November's 5.1% and slightly lower than the 4.7% increase expected by economists.

The data suggested that growth in the world’s second largest economy remained strong despite recent tightening measures.

The pound was also down against the euro, with EUR/GBP rising 0.16% to hit 0.8435.

Later in the day, the U.K. was to publish data on industrial order expectations. Elsewhere, the U.S. was to publish a weekly report on jobless claims, as well as official data on existing home sales and a report on manufacturing activity in Philadelphia.

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