Forex - GBP/USD gains on Fed comments, U.K. growth data

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Investing.com - The pound rose against the greenback on Thursday after a U.S. Federal Reserve official said stimulus measures will stay in place for now.


Cable saw further support after U.K. quarterly growth figures met expectations.

In U.S. trading on Thursday, GBP/USD was trading at 1.5108, up 0.38%, up from a session low of 1.5014 and off from a high of 1.5128.

The pair was likely to find support at 1.4832, the low from March 12, and resistance at 1.5281, Monday's high.

Federal Reserve Bank of St. Louis James Bullard said earlier that the U.S. central bank wasn't "that close" to scaling back stimulus measures.

Stimulus tools such as the Fed's monthly USD85 billion bond-buying program weaken the dollar to spur recovery, and talk of their staying in place can soften the greenback in a single session.

On Wednesday, Federal Reserve Chairman Ben Bernanke told Congress stimulus measures will stay in place, adding they have helped the economy avoid deflationary decline so far though improvements to economic indicators may prompt a policy review in upcoming months.

Also on Wednesday, the Fed released the minutes of its two-day monetary policy meeting that began April 30, which revealed that some Fed authorities favored scaling back asset purchases as early as June, which strengthened the dollar until Bullard's comments rekindled talk that stimulus stays in place for now.

Elsewhere in the U.S., the Department of Labor reported earlier that the number of individuals filing for initial jobless claims last week fell by 23,000 to 340,000, better than expectations for a decline of 18,000 to 345,000.

Jobless claims for the preceding week were revised up to 363,000 from a previously reported increase of 360,000.

A separate report showed that U.S. new home sales rose by 2.3% to 454,000 units in April, defying expectations for a decline to 425,000.

In the U.K., official data revealed earlier that the U.K. economy expanded by 0.3% in the first quarter and expanded 0.6% from the same period year earlier, unchanged from preliminary estimates and both figures in line with expectations, which gave the pound support.

The pound, meanwhile, was down against the euro and down against the yen, with EUR/GBP trading up 0.23% at 0.8564 and GBP/JPY down 0.85% at 153.93.

On Friday, the U.K. is to release industry data on mortgage approvals, while the U.S. is to unveil government data on durable goods orders.











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This article appears in: Investing , Forex and Currencies

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