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Forex - GBP/USD edges higher after upbeat U.K. data

Published 09/30/2016, 04:45 AM
Updated 09/30/2016, 04:45 AM
Pound gains some ground vs. greenback, U.K. data supports

Pound gains some ground vs. greenback, U.K. data supports

Investing.com - The pound edged higher against the U.S. dollar on Friday, after U.K. second quarter growth was revised up more than expected and an upbeat U.K. current account report eased concers over potential negative effects of Brexit.

GBP/USD hit 1.2986 during European morning trade, the session high; the pair subsequently consolidated at 1.2986, up 0.17%.

Cable was likely to find support at 1.2912, the low of Septemebr 23 and a one-month low and resistance at 1.3125, the high of September 22.

The U.K. Office for National Statistics said gross domestic product rose 0.7% in the second quarter, up from a previous estimate of 0.6% and compared to expectations for 0.6%.

However, on an annual basis, U.K. GDP increased 2.1% in the second quarter, up from a previous estimate of 1.9% but below expectations for a growth rate of 2.2%.

A separate report showed that the U.K. current account deficit widened only to £28.7 billion in the last quarter from £27.0 billion in the first quarter, whose figure was revised from a previous estimate of £32.6 billion.

Analysts had expected the current account deficit to widen to £30.5 billion in the second quarter.

Meanwhile, investors awaited the release of U.S. personal spending and consumer sentiment data, as well as report on manufacturing activity in the Chicago area for further indications on the strength of the economy.

Sentiment on the greenback soured after data on Thursday showed that U.S. pending home sales fell 2.4% last month, missing expectations for an increase of 0.3%.

The report came shortly after official data showed that the third estimate of U.S. second quarter GDP showed growth of 1.4%, revised from the previous reading of a 1.1% expansion.

Another report showed that U.S. initial jobless claims increased by 3,000 to 254,000 last week, compared to expectations for a 9,000 rise.

Sterling was also higher against the euro, with EUR/GBP declining 0.42% to 0.8618.

In the euro zone, data earlier showed that German retail sales fell 0.4% in August, disappointing expectations for a 0.3% slip.

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