Forex - GBP/USD dips as dollar gains on cheery U.S. indicators
Published May 27, 2014 12:04PM ET
Dollar gains over pound after reports reveal rising U.S. home prices, improving consumer confidence
Investing.com - The pound fell against the dollar on Monday after optimistic U.S. housing, consumer confidence and wholesale pricing data fueled demand for the greenback by keeping expectations firm that the Federal Reserve remains on track to wrapping up monetary stimulus programs this year.
In U.S. trading on Tuesday, GBP/USD was trading at 1.6800, down 0.26%, up from a session low of 1.6794 and off a high of 1.6882.
Cable was likely to find support at 1.6733, the low from May 15, and resistance at 1.6921, Wednesday's high.
The Conference Board reported earlier that its consumer confidence index rose to 83.0 this month from 81.7 in April, in line with market expectations.
Elsewhere, the Standard & Poor’s/Case-Shiller house price index rose 12.4% in March from a year earlier, beating forecasts for a gain of 11.8% and following a rise of 12.9% in February.
Healthy wholesale pricing data firmed the greenback as well.
The Commerce Department reported earlier U.S. durable goods orders rose 0.8% in April, confounding expectations for a 0.5% fall, after a 3.6% increase in March, whose figure was revised up from a previously estimated 2.9% rise.
Core durable goods orders, which are stripped of volatile transportation items, rose 0.1% last month, missing expectations for a 0.3% increase. Core durable goods orders in March were revised up to a 2.9% gain from a previously estimated 2.4% rise.
Tuesday's data renewed market expectations for the Federal Reserve to continue winding down stimulus measures this year provided recovery remains on track.
Fed stimulus tools such as monthly bond purchases weaken the dollar by suppressing long-term interest rates, sending investors to stocks instead in hopes investing and hiring follow rising equities prices.
Meanwhile in the U.K., industry data released earlier showed that U.K. mortgage approvals rose by 42,200 last month, missing expectations for a 45,200 increase. Mortgage approvals in March were revised down to a 45,000 rise from a previously estimated 45,900 increase.
Elsewhere, sterling was down against the euro, with EUR/GBP up 0.05% at 0.8106, and down against the yen, with GBP/JPY down 0.06% at 171.58.
On Wednesday, the U.K. is to publish private sector data on retail sales.
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Written By: Investing.com
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