Forex - GBP/USD pushes higher but upside seen limited

Investing.com - The pound pushed higher against the U.S. dollar on Thursday as market sentiment improved, but concerns over the outlook for growth in the U.K. economy continued to weigh.

GBP/USD hit 1.6039 during European afternoon trade, the session high; the pair subsequently consolidated at 1.6026, easing up 0.13%.

Cable was likely to find support at 1.5974, Wednesday's low and a seven-week low and resistance at 1.6079, Wednesday's high.

Market sentiment was boosted after an auction of Spanish government debt met with strong investor demand and saw borrowing costs fall.

However, sterling remained under pressure after a recent string of weak economic data, including a shock contraction in the services sector in December, fuelled concerns over a triple-dip recession.

Earlier in the week the World Bank cut its forecast for U.K. growth this year, saying the economy would grow by 1.1% in 2013, well below its June forecast for 1.6% growth.

Sentiment on sterling was also hit as political pressure mounted on British Prime Minister David Cameron to renegotiate elements of the country's European Union membership, ahead of a speech on Friday in which he was expected to outline plans to change Britain's relationship with Europe.

The pound was at nine-month lows against the euro, with EUR/GBP rising 0.48% to 0.8340.

Later Thursday, the U.S. was to produce official data on building permits and housing starts, in addition to the weekly government report on initial jobless claims and data on manufacturing activity in Philadelphia.

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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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