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Forex - GBP/USD trims losses as markets prep for Yellen speech

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Shutterstock photo - - The pound traded slightly lower against the dollar on Thursday, taking back earlier losses after investors looked past upbeat U.S. data and avoided the greenback ahead of Federal Reserve Chair Janet Yellen's speech at the annual Jackson Hole symposium on Friday.

In U.S. trading on Thursday, GBP/USD was trading down 0.05% at 1.6587 up from a session low of 1.6564 and off a high of 1.6679.

Cable was likely to find support at 1.6556, the low from April 4, and resistance at 1.6738, Monday's high.

The Federal Reserve released the minutes of its July policy meeting on Wednesday, and the document revealed that rate hikes could come sooner rather than later if the labor market continues to recover, which initially bolstered the dollar.

Profit taking sent the greenback edging lower on Thursday, as many investors bet Fed Chair Janet Yellen will provide a more dovish speech at the Fed's Jackson Hole symposium on Friday to complement the hawkish minutes in order to convey to markets that even though rates will rise, monetary authorities will make sure they do so gradually.

Upbeat U.S. data took a back seat to Yellen expectations in early-afternoon trading on Thursday.

The Federal Reserve Bank of Philadelphia said that its manufacturing index topped a three-year high of 28.0 this month from July's 23.9 reading. Analysts had expected the index to decline to 19.2 in July.

Separately, market research group Markit said that its preliminary U.S. manufacturing purchasing managers' index increased to a four-year high of 58.0 this month from a final reading of 55.8 in July. Analysts had expected the index to ease down to 55.7 in August.

Data also showed that U.S. existing home sales increased 2.4% to 5.15 million units last month from 5.03 million in June. Analysts had expected existing home sales to dip 0.4% to 5.02 million units in July.

Also on Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending Aug. 16 decreased by 14,000 to 298,000 from the previous week's revised total of 312,000.

Analysts had expected jobless claims to fall by 12,000 to 300,000 last week.

The pound fell came under pressure earlier after official data showed that U.K. retail sales rose 0.1% in July, disappointing expectations for an increase of 0.4%. Retail sales for June were revised to a 0.2% gain from a previously estimated 0.1% rise.

Elsewhere, sterling was down against the euro, with EUR/GBP up 0.22% at 0.8008, and flat against the yen, with GBP/JPY unchanged at 172.17.

On Friday, expect markets to move on speeches delivered by Fed Chair Janet Yellen and ECB President Mario Draghi at the annual economic symposium in Jackson Hole, Wyoming. offers an extensive set of professional tools for the financial markets.

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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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