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Forex - GBP/USD steady, hovers near 7-month highs

ForexSep 13, 2013 07:40AM GMT Add a Comment
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Investing.com - The pound was steady against the U.S. dollar on Friday, hovering near seven-month highs as mounting expectations for the Bank of England to raise interest rates sooner than expected supported demand for sterling.

GBP/USD hit 1.5776 during European morning trade, the session low; the pair subsequently consolidated at 1.5804, dipping 0.01%.

Cable was likely to find support at 1.5717, Wednesday’s low and resistance at 1.5840, Thursday's high and the highest since early February.

The pound remained near seven-month highs after data on Wednesday showed that the U.K. unemployment rate unexpectedly declined to 7.7% in July.

The data reinforced expectations that the BoE would raise interest rates sooner than it has indicated.

BoE Governor Mark Carney said last month the bank would keep rates on hold until the unemployment rate falls below 7%, something the bank does not see for another three years.

On Thursday, Carney said the U.K. economy is picking up as a result of the bank’s stimulus program. The comments came during testimony to parliament’s Treasury Select Committee.

Meanwhile, the dollar remained under pressure amid growing uncertainty over whether the Federal Reserve will start to unwind its USD85 billion-a-month asset purchase program at its upcoming policy meeting on September 17-18.

Separately, concerns over Syria persisted as U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov held open talks on disarming Syria's chemical weapons programs, on Thursday.

However, differences emerged at the outset of the negotiations. Commenting on the talks, Kerry said pledges of Syria's regime to give up its chemical arms were "simply not enough."

Sterling was higher against the euro with EUR/GBP slipping 0.10%, to hit 0.8407.

Later in the day, the U.S. was to release reports on retail sales and producer price inflation, as well as preliminary data from the University of Michigan on consumer sentiment.

Forex - GBP/USD steady, hovers near 7-month highs

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