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Forex - GBP/USD holds steady, near 27-month highs

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Investing.com - The pound held steady against the U.S. dollar on Tuesday, hovering near 27-month highs as comments by Bank of England Governor Mark Carney and positive U.K. manufacturing and industrial output data continued to support demand for sterling.

GBP/USD hit 1.6466 during U.S. morning trade, the pair's highest since August 2011; the pair subsequently consolidated at 1.6435, inching up 0.04%.

Cable was likely to find support at 1.6360 and resistance at 1.6530.

The pound remained supported after BoE Governor Mark Carney said Monday the U.K. economy had regained considerable strength in recent months. The comments came during a speech in New York.

In addition, data on Tuesday showed that U.K. industrial output rose strongly in October, adding to indications that the recovery is gaining traction and fuelled hopes that the BoE may tighten monetary policy ahead of other central banks.

The Office for National Statistics said industrial output increased by 0.4% in October, in line with forecasts and was up 3.2% from a year earlier. It was the largest annual gain in industrial output since January 2011.

The ONS said manufacturing production also rose 0.4% in October and was 2.7% higher on a year-over-year basis, the fastest annual growth since May 2011. Economists had forecast a 0.4% monthly increase and 2.9% annual gain.

In a separate report, the ONS said the U.K. trade deficit narrowed to GBP9.73 billion in October, from an upwardly revised deficit of GBP10.10 billion in September. Economists had expected the deficit to shrink to GBP9.35 billion.

The deficit on goods trade with the European Union rose to a record of almost GBP6.5 billion, from GBP6.2 billion in September.

Sterling was lower against the euro, with EUR/GBP edging up 0.26% to 0.8386.

In a speech on Tuesday, European Central Bank President Mario Draghi urged governments to complete a banking union, saying it was crucial at both a national and European level.

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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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