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Forex - GBP/USD erases gains as weak U.S. data curbs risk appetite

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Forex Pros - The pound erased gains against the U.S. dollar on Thursday, pulling back from the daily high as disappointing data on U.S. jobless claims added to fears over the U.S. economic recovery, curbing demand for higher yielding assets.

GBP/USD eased off 1.6417, the daily high, to hit 1.6327 during early U.S. trade, dipping 0.03%.

Cable was likely to find support at 1.6130, the low of May 25 and resistance at 1.6495, Wednesday's high.

The U.S. Labor Department said the number of people who filed for unemployment assistance in the U.S. last week fell less-than-expected, declining to a seasonally adjusted 422,000. Analysts had expected jobless claims to fall by to 420,000.

The report came after data on Wednesday showed that U.S. private-sector employment growth slowed sharply in May, while manufacturing activity slumped to a one-year low, sparking speculation that the Federal Reserve may go ahead with further quantitative easing measures in the months ahead.

Earlier in the day, the pound found support after data showed that activity in the U.K. construction sector picked up faster than expected in May, helped by a strong rise in new orders.

However, the data was unlikely to alter expectations that the Bank of England would raise interest rates this year after data on Wednesday showed that manufacturing activity in the U.K. grew at its slowest pace in 20 months in May.

The pound was also lower against the euro, with EUR/GBP surging 0.88% to hit 0.8849.

Also Thursday, U.S. government data showed that factory orders slumped more-than-expected in April.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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