Sep 06, 2013 02:19 PM IST | Source: Investing.com

Forex - GBP/USD holds steady after downbeat U.K. data

Forex - GBP/USD holds steady after downbeat U.K. data

Forex - GBP/USD holds steady after downbeat U.K. data
Investing.com - The pound held steady against the U.S. dollar on Friday, after the release of disappointing U.K. economic reports, as investors remained cautious ahead of a key U.S. jobs reports, expected later in the trading session.

GBP/USD hit 1.5578 during European morning trade, the session low; the pair subsequently consolidated at 1.5583, dipping 0.04%.

Cable was likely to find support at 1.5506, the low of September 2 and resistance at 1.5667, Thursday's high and a two-week high.

The pound came under pressure after official data showed that U.K. manufacturing production rose 0.2% in July, confounding expectations for a 0.3% rise, after an upwardly revised 2% increase the previous month.

A separate report showed that the U.K. trade deficit widened to GBP9.85 billion in July, from a dwonwardly revised deficit of GBP8.17 billion the previous month. Analysts had expected the trade deficit to narrow to GBP8.15 billion in July.

In addition, the Bank of England said that inflation expectations for the third quarter ticked down to 3.2% from 3.6%. in the three months to June.

Data also showed that U.K house prices rose less-than-expected in August, ticking up 0.4% after a 0.9% increase the previous month. Analysts had expected house prices to rise 0.7% last month.

The reports came a day after the BoE held its benchmark interest rate at 0.50% and kept the size of its asset purchase program unchanged at GBP375 billion.

Investors were looking ahead to a highly-anticipated U.S. nonfarm payrolls report later in the day, as it was seen as key to the Fed's decision on tapering its monthly bond purchases.

Separately, concerns over a U.S. military intervention against Syria's government persisted, as the U.S. government was set to vote next week on President Barack Obama's proposal to launch a missile strike.

Sterling was fractionally lower against the euro with EUR/GBP edging up 0.07%, to hit 0.8422.

Later in the day, the U.S. was to release government data on nonfarm payrolls and the unemployment rate.


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