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Forex - GBP/USD remains slightly higher, gains capped

Published 03/15/2013, 01:27 PM
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Investing.com - The pound remained slightly higer against the U.S. dollar on Friday, but gains were limited as ongoing concerns over the outlook for growth in the U.K. continued to dampen demand for sterling.

GBP/USD hit 1.5176 during U.S. morning trade, the pair's highest since March 5; the pair subsequently consolidated at 1.5114, adding 0.22%.

Cable was likely to find support at 1.4968, the low of March 7 and resistance at 1.5140, the high of March 5.

The pound remained under pressure after data earlier in the week showing that U.K. manufacturing and industrial output slumped in January reinforced concerns over the threat of a triple dip recession and the risk of further easing by the Bank of England.

Elsewhere, the University of Michigan said, in a preliminary report, that its index of consumer sentiment dropped to 71.8 in March from a reading of 77.6 the previous month, compared to expectations for a rise to 78.0.

Earlier in the day, official data showed that U.S. industrial production rose 0.7% in February, beating expectations for a 0.4% increase, after a 0.1% fall the previous month.

In addition, the Empire State manufacturing index fell less-than-expected in March, ticking down to 9.2 from a reading of 10 the previous month. Analysts had expected the index to decline to 8.4 this month.

A separate report showed that core consumer price inflation, which excluded food and energy, rose 0.2% in February after a 0.3% increase the previous month, in line with expectations.

Consumer price inflation rose 0.7% last month, more than the expected 0.5% increase, following a flat reading in January.

The pound was lower against the euro with EUR/GBP edging up 0.19%, to hit 0.8640.

The euro found support after European Union leaders endorsed “structural” budgetary assessments, granting countries such as France, Spain and Portugal extra time to bring down deficits.

Meanwhile, EU and International Monetary Fund officials continued to work on a package for Cyprus, with hopes of presenting the outline of a bailout programme to euro zone finance experts later in the day.


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