Forex - GBP/USD near 2-month lows after weak U.K. trade report

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Investing.com - The pound fell to nearly two-month lows against the U.S. dollar on Friday, as the release of downbeat trade balance data from the U.K. weighed on demand for sterling, while geopolitical concerns continued to fuel safe-haven demand.

GBP/USD hit 1.6797 during European morning trade, the pair's lowest since June 12; the pair subsequently consolidated at 1.6813, edging down 0.11%.

Cable was likely to find support at 1.6790, the low of June 12 and resistance at 1.6884, the high of August 6.


Official data earlier showed that the U.K. trade deficit widened to £9.41 billion in June, from £9.15 billion in May, whose figure was revised from a previously estimated £9.20 billion. Analysts had expected the trade deficit to narrow to £8.80 billion in June.

Meanwhile, investors remained cautious after U.S. President Barack Obama on Thursday authorized air strikes in Iraq to put an end to an onslaught by Islamic militants and begun military air-drops of humanitarian supplies to besieged religious minorities to prevent a "potential act of genocide".

Separately, Moscow banned imports of most food from the West in retaliation against sanctions against it over Ukraine.

Visiting Kiev this week, NATO's secretary general says that Moscow has massed troops on the country's border with Ukraine in preparation for a possible ground invasion.

Sterling was lower against the euro, with EUR/GBP rising 0.31% to 0.7965.

The single currency regained some support after European Central Bank President Mario Draghi on Thursday said the bank still expects a "moderate" and "uneven" economic recovery in the euro area and acknowledged that there has been a slowing down in growth momentum.

Mr. Draghi also said that interest rates will remain at present levels "for an extended period of time" and reiterated that the bank was still committed to using unconventional measures if the outlook deteriorates.

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This article appears in: Investing , Forex and Currencies

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