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Forex - GBP/USD drops on strong U.S. consumer sentiment data

Published 08/17/2012, 02:25 PM
Updated 08/17/2012, 02:26 PM
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Investing.com - The pound on Friday weakened against the dollar on news that consumer sentiment in the U.S. came in stronger than expected this month.
 
In U.S. trading on Friday, GBP/USD hit 1.5690, down 0.28%, up from a session low of 1.5675 and off from a high of 1.5739.

The pair was likely to find support at 1.5675, the earlier low, and resistance at 1.5739, the earlier high.

The dollar firmed against most major currencies on news that U.S. consumers have more faith in their economy.

A Thomson Reuters/University of Michigan preliminary consumer sentiment index for August hit its highest level since May at 73.6, up from 72.3 last month, outpacing economists' forecasts for a 72.4 reading.

The numbers fueled sentiments that despite headwinds from Europe and despite stubbornly high unemployment rates, the U.S. economy will continue to grow and put less pressure on the Federal Reserve to stimulate the economy, which would otherwise weaken the dollar.

Profit-taking sent the pair falling as well.

The pound strengthened against the greenback earlier this week on news U.K. retail sales came in stronger than expected.

The U.K. Office for National Statistics reported that retail sales increased by 0.3 percent in July, outpacing analysts' calls for a 0.1 percent decline.

June’s numbers were revised from 0.1 to 0.8 percent, fueling sentiment the U.K. economy may be improving,

The pound, meanwhile, was up against the euro and down against the yen, with EUR/GBP trading down 0.03% at 0.7852 and GBP/JPY down 0.02% at 124.80.








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