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Forex - GBP/USD extends losses amid U.S. debt jitters

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Investing.com - The pound extended losses against the U.S. dollar on Thursday, as downbeat U.K. construction activity data and concerns over the U.S. debt ceiling continued to weigh.

GBP/USD hit 1.6146 during European afternoon trade, the pair's lowest since December 31; the pair subsequently consolidated at 1.61564, sliding 0.61%.

Cable was likely to find support at 1.6134, the low of December 31 and resistance at 1.6274, the high of December 31.

Sterling came under pressure after Markit research firm and the Chartered Institute of Purchasing & Supply said that their U.K. construction purchasing managers' index fell to a seasonally adjusted 48.7 in December from a reading of 49.3 in November, slowing to a six-month low.

Economists had expected the index to ease up to 49.5 last month.

Meanwhile, investors remained cautious over the longer term outlook in the U.S., with negotiations on raising the debt ceiling still to come in February.

Sentiment strengthened on Tuesday after U.S. lawmakers passed a compromise bill to avoid the fiscal cliff, blocking a series of looming tax increases and spending cuts that could have pushed the U.S. economy back into a recession.

The pound was higher against the euro with EUR/GBP adding 0.09%, to hit 0.8105.

Also Thursday, official data showed that the number of unemployed people in Germany rose far less-than-expected in November, rising by 3,000 after a 5,000 increase the previous month.

Analysts had expected the number of unemployed people to rise by 10,000 in November.

Later in the day, the U.S. was to release a report on ADP nonfarm payrolls, as well as its weekly government report on initial jobless claims. In addition, the Federal Reserve was to publish the minutes of its most recent policy-setting meeting.

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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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