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Forex - GBP/USD falls on U.K. growth data, U.S. home sales weigh

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Investing.com - The pound weakened against the dollar on Thursday after the U.K. trimmed its first-quarter gross domestic product growth rate.

Better-than-expected pending home sales in the U.S. rekindled expectations that monetary stimulus programs will fade out soon and allow the greenback to strengthen over the long term.

Monetary stimulus tools such as the Federal Reserve's monthly USD85 billion bond-buying program weaken the dollar to spur recovery, and talk of their dismantling can strengthen the U.S. currency.

In U.S. trading on Thursday, GBP/USD was trading at 1.5261, down 0.35%, up from a session low of 1.5201 and off from a high of 1.5347.

Cable was likely to find support at 1.5201, the earlier low, and resistance at 1.5478, Tuesday's high.

The pound came under pressure after revised data showed that the U.K. economy expanded at an annual rate of 0.3% in the first quarter of this year, down from a preliminary estimate of 0.6% growth. The quarterly growth rate remained unrevised at 0.3%.

The dollar, meanwhile, saw support against the pound after the National Association of Realtors said its pending home sales index rose by 6.7% in May from April, well above expectations for a 1% gain.

Elsewhere in the U.S., jobless claims fell in line with expectations last week, government data revealed.

The Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week fell by 9,000 to 346,000, in line with expectations for a drop of 10,000 to 345,000.

A separate report showed that U.S. personal spending was up 0.3% in May, in line with expectations.

The pound, meanwhile, was down against the euro and up against the yen, with EUR/GBP trading up 0.63% at 0.8548 and GBP/JPY up 0.28% at 150.12.

On Friday, the U.S. will release a report on manufacturing activity in Chicago and revised data from the University of Michigan on consumer sentiment.

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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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