Forex - GBP/USD holds gains ahead of U.S. budget talks

Shutterstock photo - The pound held gains against the U.S. dollar on Thursday, after U.S. data painted a mixed picture of the strength of the country's economic recovery, as U.S. budget negotiations were set to resume.

GBP/USD hit 1.6202 during U.S. morning trade, the pair's highest since December 24; the pair subsequently consolidated at 1.6173, adding 0.22%.

Cable was likely to find support at 1.6125, the session low and resistance at 1.6206, the high of December 24.

The Conference Board said its index of consumer confidence in the U.S. fell to 65.1 in December, a four-month low, from a reading of 71.5 in November, whose figure was revised down from 73.7.

Analysts had expected the index to decline to 70.0 in December.

A separate report showed that new home sales in the U.S. rose by 4.4% to a seasonally adjusted 377,000 units in November, compared to expectations for an increase to 378,000.

New home sales for October were revised down to 361,000 units from a previously reported 368,000.

The data came after the U.S. Department of Labor said in a report earlier that the number of individuals filing for initial jobless benefits in the week ending December 22 fell by 12,000 to a seasonally adjusted 350,000, compared to expectations for a decline of 2,000 to 360,000.

Jobless claims for the preceding week were revised up to 362,000 from a previously reported 361,000.

Meanwhile, market players remained focused on developments surrounding the fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.

President Barack Obama was to end his vacation and return to Washington on Thursday in order to take part in talks to avert the crisis ahead of the year-end deadline. Both chambers of Congress are also due to return to work on Thursday.

Elsewhere, the pound was lower against the euro with EUR/GBP edging up 0.13%, to hit 0.8205.

Also Thursday, industry data showed that mortgage approvals in the U.K. rose less-than-expected in November, increasing by 33,600 after a 33,100 rise the previous month. Analysts had expected mortgage approvals to rise by 34,600 in November. - 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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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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