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Forex - GBP/USD higher despite U.K. construction data

Posted: 2/4/2013 6:44:00 AM
Referenced Stocks: - The pound pushed higher against the dollar on Monday but gains looked likely to remain limited after data showed that the U.K. construction sector remained in contraction territory in January, underlining concerns over the faltering economy.

GBP/USD hit 1.5740 during European morning trade, the session high; the pair subsequently consolidated at 1.5721, gaining 0.15%.

Cable was likely to find support at 1.5689, the session low and an almost five month low and resistance at 1.5772, the high of January 29.

The U.K. construction purchasing managers' index held steady at a 48.7 in January, unchanged from December's reading, disappointing expectations for an improvement to 49.1.

The weak data fuelled concerns over the outlook for the U.K. economy, which contracted by 0.3% in the three months to December.

Market sentiment was hit by fresh concerns over the euro zone as an escalating political crisis in Spain pushed the country's borrowing costs higher.

Spanish Prime Minister Mariano Rajoy faced calls to resign, following corruption allegations against him and senior officials in the ruling Popular Party.

The yield on Spanish 10-year bonds rose to 5.41% on Monday from 5.21% on Friday, as investor concerns over the deepening political crisis mounted.

The euro retreated from 15-month highs against the pound, with EUR/GBP dropping 0.72% to 0.8628.

The U.S. was to release official data on factory orders later in the trading day. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.
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