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by ForexNewsNow Team on October 15, 2010

GBP/USD pares gains as FX traders lose appetite for risk

GBP USD analysis - a pile of poundsNEW YORK (Forex News Now) – Sterling pared gains versus the dollar on Friday, as FX traders lost their appetite for risk in the wake of comments by the Federal Reserve chairman on further action to prop up the U.S. economy.

In late European currency market trading, GBP/USD hit 1.6018, up 0.05 percent on the day, after retreating from an 8-month high of 1.6109.

Bernanke said earlier during a speech to the Federal Reserve Bank of Boston that the U.S. economy is growing at a pace “less vigorous than we would like.”

The Fed chief added: “The risk of deflation is higher than desirable… There would appear — all else being equal — to be a case for further action.”

According to GBP USD analysis, cable was likely to touch support around Thursday’s low, 1.5888, and encounter resistance around 1.6109.

The pound’s gains also came following the release of a slew of mixed economic data in the United States. Reports on retail sales and manufacturing in New York State were better than expected; however, data on consumer price inflation and consumer morale fell short of expectations.

Elsewhere, sterling slipped versus the yen: GBP/JPY traded at 130.24, down 0.17 percent, according to intraday analysis.

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