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Forex - GBP/USD remains lower as Ukraine overshadows U.K. data

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Investing.com -

Investing.com - The pound remained lower against the U.S. dollar on Friday, as concerns over mounting tensions in Ukraine overshadowed upbeat U.K. economic reports published earlier in the trading session.

GBP/USD hit 1.6838 during U.S. morning trade, the pair's lowest since May 2; the pair subsequently consolidated at 1.6855, declining 0.45%.

Cable was likely to find support at 1.6806, the low of April 30 and resistance at 1.6939, the session high.

Market sentiment weakened after pro-Russia separatists in eastern Ukraine ignored a public call by Russian President Vladimir Putin to postpone a referendum on self-rule. They said they plan to go ahead on Sunday with a vote that some fear could lead to a civil war.

European Commission President Jose Manuel Barroso said on Friday that the European Union was still struggling to agree on what approach to take on the crisis and that the event was the biggest threat to European security since the fall of the Berlin Wall.

Earlier Friday, official data showed that U.K. manufacturing production rose 0.5% in March, beating expectations for a 0.3% gain, after a 1.0% increase the previous month.

A separate report showed that the U.K trade deficit narrowed to £8.48 billion in March, from £8.75 billion in February, whose figure was revised from a previously estimated deficit of £9.09 billion. Analysts had expected the trade deficit to widen to £9.00 billion in March.

The data added to a recent string of strong economic reports indicating that the recovery is deepening, fuelling further expectations for a U.K. rate hike in the early part of next year.

Sterling was little changed against the euro, with EUR/GBP easing up 0.03% to 0.8176.

The single currency remained under pressure after European Central Bank President Mario Draghi said the central bank governing council is comfortable with acting at its next meeting, after the bank has published fresh forecasts for inflation and growth.

Also Friday, official data showed that Germany's trade surplus narrowed to €14.8 billion in March from €15.8 billion in February, whose figure was revised from a previously estimated surplus of €15.7 billion.

Analysts had expected the trade surplus to widen to €16.6 billion in March.

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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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