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Forex - GBP/USD rises to nearly 2-month highs after strong U.K. data

Published 02/25/2015, 04:55 AM
Updated 02/25/2015, 04:55 AM
Pound gains ground vs. dollar as U.K. data, Yellen comments support

Pound gains ground vs. dollar as U.K. data, Yellen comments support

Investing.com - The pound rose to nearly two-month highs against the U.S. dollar on Wednesday, after data showed that U.K. mortgage approvals rose more-than-expected last month, while comments by Federal Reserve Chair Janet Yellen weighed heavily on the greenback.

GBP/USD hit 1.5539 during European morning trade, the pair's highest since January 2; the pair subsequently consolidated at 1.5509, gaining 0.36%.

Cable was likely to find support at 1.5401, Tuesday's low and resistance at 1.5586, the high of January 2.

In a report, the British Bankers' Association said that mortgage approvals rose by 36,400 in January, beating expectations for an increase of 36,200. December's figure was revised to a 35,800 gain from a previously estimated rise of 35,700.

Meanwhile, the greenback remained under pressure after Fed Chair Yellen said it was "unlikely" that economic conditions would warrant an interest rate increase for "at least the next couple of FOMC meetings".

In prepared remarks during testimony to the Senate Banking Committee, Yellen added that if the economy keeps improving as the Fed expects it will modify its forward guidance, but emphasized that a modification of its language should not be read as indicating that a rate hike would automatically happen within a number of meetings.

On the economy, Yellen said growth was expected to be strong enough to result in a further gradual decline in the unemployment rate and added that while overseas risks remain "the recent decline in world oil prices could boost overall global economic growth more than we expect."

Sterling was steady against the euro, with EUR/GBP at 0.7332.

The single currency remained supported after Greece’s package of economic reforms was approved by its euro zone creditors on Tuesday, securing Athens an extension of its bailout for another four months.

The package of measures includes taxation and public spending reforms and consolidating pension funds to reduce costs. Athens also pledged not to unwind state privatization programs and to stick to budget targets.

Later in the day, the U.S. was to release data on new home sales.

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