Investing.com - The pound remained close to one-month against
the U.S. dollar on Friday, as a disappointing U.S. consumer
sentiment report weighed on the greenback, while ongoing
expectations for the Bank of England to soon raise interest rates
continued to support sterling.
GBP/USD hit 1.6991 during U.S. morning trade, the pair's highest
since May 7; the pair subsequently consolidated at 1.6955, adding
Cable was likely to find support at 1.6852, the low of May 22
and resistance at 1.6997, the high of May 6.
In a preliminary report, the University of Michigan said its
consumer sentiment index fell to 81.2 this month from 81.9 in May,
whose figure was revised up from a previously estimated reading of
81.8. Analysts had expected the index to rise to 83.0 in June.
Earlier Friday, official data showed that U.S. producer price
inflation fell 0.2% in May, confounding expectations for a 0.1%
rise, after a 0.6% increase the previous month.
Core producer price inflation, which excludes food, energy and
trade, slipped 0.1% last month, compared to expectations for an
increase of 0.1%, after a 0.5% rise in April.
Meanwhile, market sentiment remained under pressure after U.S.
President Barack Obama warned of possible military strikes in Iraq
after a rebellion led by a Sunni Islamist group continued to spread
rapidly through the country.
Demand for the pound was still underpinned by data on Wednesday
showing that the U.K. unemployment rate fell to 6.6% in the three
months to April, the lowest since early 2009. The consensus
forecast had been for a decline to 6.7% from 6.8% in the previous
Earlier in the week, BoE policymaker Ian McCafferty said the
bank is moving closer to hiking rates and added that economic data
over the coming months would be key in determining the exact timing
of a rate increase.
Sterling was higher against the euro, with EUR/GBP shedding
0.24% to 0.7986.
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