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Forex - GBP/USD hits 4-day high after downbeat U.S. data

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Forexpros - The pound rose to a four-day high against the U.S. dollar on Monday, after disappointing U.S. data on manufacturing activity in the New York region and a report showing foreigners were net sellers of U.S. assets in June weighed on dollar sentiment.

GBP/USD hit 1.6397 during U.S. morning trade, the highest since August 9; the pair subsequently consolidated at 1.6393, climbing 0.68%.

Cable was likely to find support at 1.6165, last Friday's low and resistance at 1.6475, the high of August 8.

The New York Federal Reserve's index of manufacturing conditions unexpectedly deteriorated in August, remaining in negative territory for the third consecutive month, official data showed earlier.

In a report, the Federal Reserve Bank of New York said that its general business conditions index fell by 3.9 points to minus 7.7 in August from minus 3.8 in July.

Analysts had expected the index to improve to minus 0.4 in August.

A separate report showed that net foreign purchases of long-term U.S. securities totaled USD3.7 billion in June, significantly below expectations of USD30.1 billion.

According to the data, foreign investors sold USD18.3 billion in U.S. Treasuries in June, the most since June 2000.

Meanwhile, Bank of England policy maker David Miles said in an interview published Monday that the U.K. economy is on a fragile recovery path, but added that further quantitative easing was not necessary.

"There could be circumstances under which I would judge the right policy would be to embark on further asset purchases but that's not how I've seen things thus far," Miles said.

Elsewhere, the pound was down against the euro, with EUR/GBP gaining 0.68% to hit 0.8814.

Markets were awaiting Tuesday's meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy in Paris, to further asses the region's debt crisis and how officials plan to handle escalating contagion threats.

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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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