Forex – GBP/USD holds steady after downbeat U.S. data


Pound little changed vs. dollar, Yellen in focusPound little changed vs. dollar, Yellen in focus – The pound held steady against the U.S. dollar on Wednesday, after the release of disappointing U.S. economic reports as markets eyed additional remarks by Federal Reserve Chairwoman Janet Yellen later in the day.

GBP/USD hit 1.7116 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.7136, dipping 0.05%.

Cable was likely to find support at 1.7060, Tuesday’s low and resistance at 1.7192, Tuesday’s high and a five-and-a-half year high.

Official data showed that industrial production rose by a seasonally adjusted 0.2% last month, below forecasts for a 0.4% gain.

Industrial production for May was revised down to a gain of 0.5% from a previously reported increase of 0.6%.

A separate report showed that US producer prices rose by a larger than forecast 0.4% in June, bringing the annual rate to 1.9%.

But the greenback remained supported after Ms. Yellen said Tuesday that rates could rise sooner if the economic recovery continued to improve. However, the Fed chair also said that if the recovery was disappointing monetary policy would remain accommodative.

Earlier Tuesday, the pound shrugged off data showing that the U.K. unemployment rate fell to its lowest since late 2008 in the three months to May.

The Office for National Statistics said that the claimant count, or the number of people claiming unemployment benefit, fell by 36,300 in June, compared to expectations for a decline of 27,000. May’s figure was revised to 32,800 from a previously reported decline of 27,400.

The unemployment rate declined to 6.5% in the three months to May, from 6.6% in the previous three months.

The robust employment report added to indications that the economic recovery in the U.K. is deepening, fuelling expectations that the Bank of England will hike rates before the end of the year.

However, the report showed that growth in real wages remains weak.

Average weekly earnings, excluding bonuses, rose by an annualized 0.7% in the three months to May, the slowest since record began in 2001. The annual rate of inflation over the same period was 1.6%.

Sterling was higher against the euro, with EUR/GBP shedding 0.25% to 0.7894.

Later in the day, Fed Chair Janet Yellen Carney was to testify for the second day to the House financial committee.

Source By Breaking News Website | BreakingNews.WS