FRX: Forex - GBP/USD extends gains, hits 2-½ week high
Forexpros - The pound extended gains against the U.S. dollar on Thursday, rising to a two-and-a-half week high as bleak U.S. economic reports sparked fresh expectations for more easing by the Federal Reserve, while earlier U.K. data continued to support demand for sterling.
GBP/USD hit 1.5738 during U.S. morning trade, the pair’s highest since July 30; the pair subsequently consolidated at 1.5735, rising 0.33%.
Cable was likely to find support at 1.5637, the session low and resistance at 1.5836, the high of May 18.
The greenback came under broad selling pressure after official data showed that manufacturing activity in the Philadelphia-region contracted for the fourth consecutive month in August, underlining concerns over the strength of the U.S. economy.
In a report, the Federal Reserve Bank of Philadelphia said that its manufacturing index improved by 5.8 points to minus 7.1 in August from July’s reading of minus 12.9.
Analysts had expected the index to improve by 7.9 points to a reading of minus 5.0 in August.
Earlier Thursday, the Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week rose to 366,000, slightly above expectations for an increase to 365,000.
A separate report showed that the number of building permits issued in the U.S. in July rose 6.8% to 0.812 million, compared to expectations for an increase of 1.2% to 0.770 million.
But housing starts fell by 1.1% in July to a seasonally adjusted 0.746 million last month, compared to expectations for a decline of 0.5% to 0.757 million.
Meanwhile, the pound remained supported after the Office for National Statistics said U.K. retail sales rose by 0.3% in July, defying expectations for a 0.1% decline and June’s numbers were revised up to a 0.8% gain from a previously reported increase of 0.1%.
Elsewhere, sterling was lower against the euro with EUR/GBP edging up 0.13%, to hit 0.7846.
Also Thursday, official data showed that consumer price inflation in the euro zone held steady at 2.4% in July, unchanged from the previous month and in line with market expectations.
