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Forex - GBP/USD remains near 2-week highs, U.K. data supports

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Investing.com - " The pound remained near two-week highs against the U.S. dollar on Thursday, as concerns over the effects of the U.S. government shutdown on the nation's economy weighed on the greenback, despite news of a budget agreement to raise the debt ceiling, averting a default.

GBP/USD hit 1.6154 during U.S. morning trade, the pair's highest since October 4; the pair subsequently consolidated at 1.6139, rallying 1.20%.

Cable was likely to find support at 1.5941, the session low and resistance at 1.6241, the high of October 3.

The dollar strengthened broadly earlier, after the U.S. Congress passed a bill to reopen the government and raise the debt ceiling, just hours ahead of a deadline to avert a debt sovereign debt default.

The deal will fund the government until January 15 and raise the government borrowing limit until February 7. Both sides also agreed to talks over broad budget issues in an attempt to reach a longer-term deal by December 13.

Bu the greenback came under pressure amid fears over the impact of the government shutdown on the already fragile economic recovery, which could prompt the Federal Reserve to delay plans for scaling back its stimulus program until at least the start of next year.

The possibility of another debt crisis also loomed, as the temporary solution does not resolve the underlying budgetary issues dividing Republicans and Democrats.

Meanwhile, the U.S. Department of Labor said Thursday the number of individuals filing for initial jobless benefits last week declined by 15,000 to a seasonally adjusted 358,000 from a downwardly revised 373,000 in the preceding week.

Analysts had expected U.S. jobless claims to decline to 335,000 last week.

A separate report showed that the Philly Fed manufacturing index ticked down to 19.8 from 22.3 in September, but came in above expectations for a reading of 15.0.

The pound found support after data released on Thursday showed that U.K. retail sales rose at a faster than expected rate in September.

The Office for National Statistics said U.K. retail sales rose 0.6% in September from a month earlier, compared to expectations for a 0.4% increase and were 2.2% higher on a year-over-year basis.

Sterling was higher against the euro with EUR/GBP slipping 0.19%, to hit 0.8467.

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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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