Forex - GBP/USD remains lower after mixed U.S. data

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Investing.com - The pound remained lower against the U.S. dollar on Thursday, after the release of mixed U.S. data, as the Federal Reserve's decision to begin tapering its stimulus program next month continued to support the greenback.

GBP/USD hit 1.6336 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.6347, shedding 0.26%.

Cable was likely to find support at 1.6350 and resistance at 1.6450.

The Federal Reserve Bank of Philadelphia said that its manufacturing index improved to 7.0 this month from November's reading of 6.5. Analysts had expected the index to rise to a reading of 10.0 in December.

A separate report showed that U.S. existing home sales declined 4.3% to a seasonally adjusted 4.90 million units last month from 5.12 million in October. Analysts had expected U.S. existing home sales to fall 1.5% to 5.03 million units in November.

The data came after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending December 14 increased by 10,000 to a seasonally adjusted 379,000, the highest level since late-March.

Analysts had expected U.S. jobless claims to to 334,000 last week from the previous week's revised total of 369,000.

On Wednesday, the Fed announced that it would reduce its USD85 billion-a-month bond buying program by USD10 billion in January. Outgoing Fed Chairman Ben Bernanke said the economy was continuing to make progress.

The U.S. central bank reiterated that interest rates are likely to remain low even after the unemployment rate drops below 6.5%, the threshold at which the Fed has previously said it would start to consider rate increases.

In the U.K., the Office for National Statistics earlier said retail sales increased by 0.3% last month, matching forecasts. Retail sales were 2% higher on a year-over-year basis, the ONS said, undershooting expectations for a 2.3% gain, after rising at an annual rate of 1.8% in October.

Demand for the pound remained supported after data on Wednesday showed that the U.K. unemployment rate unexpectedly fell to a four-and-a-half year low of 7.4% in the three months to October, fuelling hopes that the Bank of England will raise interest rates ahead of other central banks.

Sterling was steady against the euro, with EUR/GBP inching up 0.02% to 0.8353.


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This article appears in: Investing , Forex and Currencies

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