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by ForexNewsNow Team on October 1st, 2010

GBP USD analysis: Pound jumps despite downbeat U.K. data

GBP USD analysis - a pile of poundsNEW YORK (Forex News Now) – Sterling jumped against the dollar on Friday, erasing some of its recent losses, despite disappointing reports on manufacturing activity and housing market equity in Britain.

In late U.S. currency market trading, GBP/USD hit 1.5828, up 0.71 percent on the day.

A survey of purchasing managers by the Markit market research group showed earlier that U.K. manufacturing grew at its slowest pace for 10 months in September, raising concerns about the strength of Britain’s economic recovery.

According to GBP USD analysis, cable was likely to touch support around Thursday’s low, 1.5669, and encounter immediate resistance around the high of Aug. 6, 1.5998.

Sterling’s gains also came after a key Federal Reserve official, Bill Dudley, said additional easing measures by the Fed are likely.

“We have tools that can provide additional stimulus at costs that do not appear to be prohibitive,” said Dudley, speaking at a meeting in New York.

“Thus, I conclude that further action is likely to be warranted unless the economic outlook evolves in a way that makes me more confident that we will see better outcomes for both employment and inflation before too long.”

Elsewhere, the pound dropped versus the euro: EUR/GBP traded at 0.86, up 0.16 percent, according to intraday analysis.

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