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by ForexNewsNow Team on July 8, 2010

Pound sags vs dollar on weak housing, manufacturing data

NEW YORK (Forex News Now) – Sterling sagged against the dollar on Thursday, retreating from a 2-month high in the wake of disappointing data on the U.K. housing market and manufacturing sector.

In U.S. afternoon currency trading, GBP/USD traded at 1.5128, down 0.41 percent on the day, after falling from 1.5241, the currency pair’s highest since May 4.

Industry data showed earlier that U.K. house prices fell unexpectedly for the third straight month in June, as the housing market recovery showed further signs of faltering.

The report by the Halifax building society was followed by data from the U.K. statistics bureau, which showed that British manufacturing production grew at a slower-than-forecast pace in May.

According to forex analysis, GBP/USD is likely to touch immediate support around Wednesday’s low, 1.5081, and encounter resistance around the high of May 3, 1.5316.

Also Thursday, the Bank of England held its benchmark interest rate at a historic low of 0.5 percent, for the 17th month in a row. The move came as BoE policymakers consider the potential impact of the U.K. government’s recently announced harsh austerity budget.

The pound also slumped versus the euro on Thursday: EUR/GBP traded at 0.8375, up 0.71 percent on the day.


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