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by ForexNewsNow Team on August 13, 2010

GBP/USD extends gains as Europe GDP data whets risk appetite

NEW YORK (Forex News Now) – Sterling rose against the dollar on Friday, snapping a 4-day losing streak, after better-than-expected GDP data from the euro zone whetted FX traders’ risk appetite.

In European afternoon currency trading, GBP/USD struck 1.5604, up 0.16 percent on the day.

Official data showed earlier that the euro zone economy grew 1 percent in the second quarter, well above market expectations, with Germany’s performance more than offsetting a sharp decline in Greece and slow growth in Spain and Italy.

According to forex analysis, GBP/USD was likely to touch immediate support around the low of July 30, 1.5551, and encounter resistance around Wednesday’s high, 1.586.

The pound’s gains also came ahead of a key monthly report by the University of Michigan on consumer sentiment, and data from the Census Bureau on U.S. business inventories.

Elsewhere, sterling climbed versus the yen: GBP/JPY traded at 133.93, up 0.08 percent.

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