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Forex - GBP/USD extends gains on U.K. data, Spain reports

ForexSep 21, 2012 04:54AM ET
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Investing.com - The pound extended gains against the U.S. dollar on Friday, rising to a five-month high, after data showed that U.K. public sector net borrowing rose less-than-expected in August, while investors eyed developments in Spain amid speculation of an imminent bailout.

GBP/USD hit 1.6294 during European morning trade, the pair's highest since April 30; the pair subsequently consolidated at 1.6294, climbing 0.49%.

Cable was likely to find support at 1.6213, the session low and resistance at 1.6302, the high of April 30.

Official data showed that U.K. public sector net borrowing rose to GBP12.4 billion in August, below the expected increase to GBP13.3 billion, following a reading of minus GBP1.9 billion the previous month.

Meanwhile, sentiment also strengthened after the Financial Times reported earlier that euro zone policymakers will unveil a financial bailout program for Spain as early as next week.

According to the newspaper, Spanish Economy Minister Luis de Guindos was in talks with European Commission authorities to facilitate a new rescue program that will be presented on September 27.

Risk appetite weakened broadly on Thursday, after a string of downbeat economic reports from the U.S., the euro zone and China sparked fresh concerns over the outlook for global economic growth.

Elsewhere, the pound was steady against the euro with EUR/GBP dipping 0.03%, to hit 0.7995.

Trading volumes were expected to remain light on Friday, as no major economic indicators were to be released throughout the day.

Forex - GBP/USD extends gains on U.K. data, Spain reports

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