Forex - Pound hits fresh 1-1/2 month lows vs. stronger dollar
Investing.com
Published Jul 31, 2014 04:28AM ET
Pound drops to 1-1/2 month lows against greenback
Investing.com - The pound dropped to fresh one-and-a-half month lows against the U.S. dollar on Thursday, as Wednesday's upbeat U.S. economic growth data continued to support demand for the greenback, although the Federal Reserve's latest policy statement limited gains.
GBP/USD hit 1.6874 during European morning trade, the pair's lowest since June 12; the pair subsequently consolidated at 1.6879, shedding 0.20%.
Cable was likely to find support at 1.6790, the low of June 12 and resistance at 1.6955, Wednesday's high.
The dollar strengthened broadly after official data showed that U.S. gross domestic product expanded at an annual rate of 4.0% in the three months to June, outstripping forecasts of 3.0%.
In addition, the contraction in the first quarter was revised to 2.1% from a previously reported 2.9% contraction.
On Wednesday, the Fed’s latest rate statement said that considerable slack still remains in the labor market, despite the recent improvement in jobs growth, and that rates will remain on hold for longer.
The central bank also said inflation is rising and was moving closer to its long-term target.
In the U.K., data on Thursday showed that house price inflation rose 0.1% this month, confounding expectations for a 0.5% increase, after a 1% gain in June.
Sterling was also lower against the euro, with EUR/GBP adding 0.20% to 0.7936.
Also Thursday, official data showed that German retail sales rose 1.3% in June, exceeding expectations for a 1.0% increase, after 0.2% fall in May whose figure was revised from a previously estimated 0.6% decline.
A separate report showed that French consumer spending rose 0.9% in June, compared to expectations for an uptick of 0.1%, after a 0.7% increase in May whose figure was revised from a previously estimated 1% gain.
Later in the day, the U.S. was to release the weekly report on initial jobless claims, as well as data on manufacturing activity in the Chicago area.
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Written By: Investing.com
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