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Forex - GBP/USD holds gains, near 2-month highs

ForexApr 26, 2013 10:39AM ET
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Investing.com - The pound held gains against the U.S. dollar on Friday, hovering near two-month highs as Thursday's data showing that the U.K. economy returned to growth in the first quarter continued to support demand for sterling, while mixed U.S. data weighed on the greenback.

GBP/USD hit 1.5498 during U.S. morning trade, the pair's highest since February 19; the pair subsequently consolidated at 1.5490, gaining 0.37%.

Cable was likely to find support at 1.5341, the low of April 12 and resistance at 1.5689, the high of February 13.

The pound remained supported after the Office for National Statistics on Thursday said U.K. gross domestic product expanded by a seasonally adjusted 0.3% in the three months to March, above expectations for a 0.1% gain and avoiding a triple dip recession.

The U.K.’s economy shrank by 0.3% in the final quarter of 2012.

The U.K. economy expanded 0.6% in the first quarter from a year earlier, compared to expectations for a 0.3% increase.

In the U.S., final data showed that the University of Michigan's consumer sentiment index rose to 76.4 in April, from a reading of 72.3 the previous month, beating expectations for an increase to 73.2.

The data came after the Bureau of Economic Analysis said, in a preliminary report, that U.S. gross domestic product rose 2.5% in the first quarter, less than the expected 3.0% increase, after a 0.4% rise in the previous quarter.

The pound was also higher against the euro with EUR/GBP shedding 0.31%, to hit 0.8403.

The euro remained under pressure amid speculation over a possible rate cut by the European Central Bank after Goldman Sachs on Thursday said it now expects the ECB to cut rates by 0.25% at next week's policy meeting.

Forex - GBP/USD holds gains, near 2-month highs

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