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Forex - Pound pares back gains vs. dollar

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Investing.com - The pound trimmed gains against the dollar on Thursday, as concerns over financial stability in the euro zone continued to underpin safe haven demand for the greenback.

GBP/USD pulled back from 1.5176, the session high, to hit 1.5129 during European afternoon trade, up just 0.1% for the day.

Cable was likely to find support at 1.5091, Wednesday's low and resistance at 1.5246, the high of March 22.

Sterling hit session highs against the dollar earlier after data showing that the U.K. services sector grew at the strongest pace in five months in January eased concerns over the risk of a recession.

The Office for National Statistics said U.K. service output rose 0.3% in January, the biggest rise since August, bringing the annualized rate of output to 0.8%.

The report eased concerns over prospects for a triple-dip recession after previous economic data showed that U.K. manufacturing output fell at the fastest rate in six months in January.

Safe haven demand continued to be underpinned as banks in Cyprus reopened for the first time in almost two weeks, with capital controls in place to prevent a run on banks.

Meanwhile, in Italy doubts continued over whether a stable coalition government could be formed, fuelling concerns that the country may have to go back to the polls.

The pound was lower against the euro, with EUR/GBP rising 0.17% to 0.8461 after touching a two month low of 0.8416 earlier in the session.

In the U.S., official data showed that the number of people who filed for initial unemployment assistance rose by 16,000 to a seasonally adjusted 357,000 last week, compared to expectations for an increase to 340,000.

A separate report showed that U.S. gross domestic product expanded at an annual rate of 0.4% in the three months to December, lower than forecasts for a 0.5% expansion.

The growth rate was the slowest since the first quarter of 2011, but was higher than initial estimates for growth of 0.1%.

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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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