Investing.com - The pound pushed higher against the U.S. dollar
on Wednesday, after the release of positive U.S. data, although
gains were limited by sustained concerns over the outlook for
growth in the U.K.
GBP/USD hit 1.5188 during U.S. morning trade, the session high; the
pair subsequently consolidated at 1.5169, rising 0.28%.
Cable was likely to find near-term support at 1.5068, Monday's low
and the pair's lowest since July 2010 and resistance at 1.5275, the
high of February 21.
The U.S. Commerce Department said durable goods orders dropped 5.2%
in January, compared to expectations for a decline of 4.4%.
Core durable goods orders, which exclude volatile transportation
items, rose 1.9% last month, compared to expectations for a 0.2%
Meanwhile, the U.S. National Association of Realtors said its
pending home sales index rose by 4.5% in January, beating
expectations for a 1.5% gain.
In the U.K., the Office for National Statistics earlier said the
economy contracted 0.3% in the three months to December, in line
with initial estimates and economists' forecasts.
The economy expanded by 0.3% year-on-year, better than initial
estimates of flat output.
The weak data reinforced concerns over the threat of a triple-dip
recession, after ratings agency Moody's downgraded the U.K.'s
triple-A rating by one notch last week, citing a weak outlook for
growth and a rising debt burden.
Meanwhile, expectations for further monetary easing by the Bank of
England remained intact after the minutes of the central bank's
February meeting indicated that policymakers are moving closer to
another round of asset purchases.
Overall market sentiment remained subdued amid fears that
inconclusive Italian election results could result in a prolonged
period of political instability and stoke fresh concerns over the
crisis in the euro zone.
Sterling was steady against the euro, with EUR/GBP edging up 0.05%
Also Wednesday, an auction of Italian five and 10-year Italian
government bonds met with solid investor demand on Wednesday, but
saw borrowing costs rise sharply, with the yield on 10-year bonds
climbing to a four month high.
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