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Forex - GBP/USD holds gains as U.K. data still supports

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Shutterstock photo - The pound held gains against the U.S. dollar on Monday, after the release of positive U.S. data, as an earlier U.K. manufacturing report continued to support demand for sterling.

GBP/USD hit 1.5248 during U.S. morning trade, the session high; the pair subsequently consolidated at 1.5243, adding 0.23%.

Cable was likely to find support at 1.5166, the low of June 28 and a one-month low and resistance at 1.5347, the high of June 27.

The Institute for Supply Management said its manufacturing purchasing managers' index rose to 50.9 from 49.0 in May, above expectations for a reading of 50.5.

Investors were looking ahead to Friday's U.S. nonfarm payrolls data, for further clues on when the Federal Reserve may decide to unwind its USD85 billion-a-month stimulus program.

Earlier Monday, Markit said that its U.K. manufacturing purchasing managers' index rose to a seasonally adjusted 52.5 in June from an upwardly revised reading of 51.5 in May.

Analysts had expected the manufacturing PMI to hold steady at 51.5 last month.

Rob Dobson, senior economist at survey compiler Markit, said the data indicated that manufacturing output rose by around 0.5% over the second quarter and pointed to economic growth picking up from the first quarter's 0.3% to at least 0.5%.

The report also made it increasing unlikely that the Bank of England would implement additional stimulus measures at its monthly meeting later in the week, Dobson said.

A separate report showed that net lending to individuals in the U.K. fell less-than-expected in May.

The BoE said total net lending to individuals fell to GBP1.0 billion from a revised GBP1.3 billion in April. Analysts had expected net lending to increase to GBP1.4 billion in May.

The report also showed that the number of final mortgage approvals rose to 58,000 in May from 54,000 in April, above expectations for an increase to 56,000.

Sterling was steady against the euro with EUR/GBP dipping 0.06%, to hit 0.8549.

In the euro zone, official data showed that the unemployment rate ticked up to 12.1% in May from 12% in April, compared to expectations for a reading of 12.3%.

Another report showed that consumer price inflation in the euro zone rose 1.6% in June from 1.4% in May, in line with expectations. - 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.

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