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Forex - GBP/USD slips lower, eyes on EU talks

Published 10/18/2012, 11:20 AM
Updated 10/18/2012, 11:21 AM
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Investing.com - The pound slipped lower against the U.S. dollar on Thursday, as disappointing U.S. jobless data weighed on sentiment, while investors remained cautious ahead of a meeting of European officials.

GBP/USD hit 1.6116 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.6134, dipping 0.09%.

Cable was likely to find support at 1.6059, Tuesday’s low and resistance at 1.6216, the high of October 5.

The U.S. Department of Labor said the number of individuals filing for initial jobless benefits last week rose by 46,000 to a seasonally adjusted 388,000, compared to expectations for an increase to 365,000.

The previous week’s figure was revised up to 342,000 from a previously reported 339,000, which was the lowest reading since February 2008.

A separate report showed that manufacturing activity in Philadelphia expanded for the first time in six months in October.

The Federal Reserve Bank of Philadelphia said its manufacturing index improved to 5.7 from minus 1.9 in September and better than expectations for a reading of 1.0.

The pound rose to the session high earlier, after official data showed that U.K. retail sales rose by a seasonally adjusted 0.6% in September, beating expectations for a 0.4% gain, adding to hopes for a sustained recovery in the recession-hit economy.

Meanwhile, investors remained cautious ahead of the start of a two-day European Union summit, although no major announcements on Spain or Greece were expected.

The pound was fractionally higher against the euro, with EUR/GBP inching down 0.05% to 0.8120.

Also Thursday, In the euro zone, Spain saw the yield on 10-year government bonds fall to the lowest level since April at an auction of government debt earlier in the day.

Spain’s Treasury sold EUR1.51 billion worth of ten-year government bonds at an average yield of 5.45%, down from 5.66% at a similar auction last month.


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