Forexpros – The pound erased gains against its U.S. counterpart on Thursday, falling to a more than four-month low as weak U.S. economic data failed to reassure investors on the strength of the country’s economic recovery while concerns over Spain’s financial woes persisted.
GBP/USD pulled back from 1.5526, the session high, to hit 1.5449 during U.S. morning trade, dropping 0.19%.
Cable was likely to find support at 1.5395, the low of January 9 and resistance at 1.5525, the day’s high.
In the U.S., revised data showed that the economy grew at a slower rate than initially estimated during the first three months of 2012, with first quarter gross domestic product expanding by 1.9%, in line with expectations, down from an initial estimate of 2.2%.
The Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week rose to 383,000, defying expectations for a decline to 370,000, while a separate report showed that the U.S. private sector added 133,000 jobs in May, missing expectations for an increase of 148,000.
In addition, industry data showed that manufacturing activity in the Chicago area slowed significantly more-than-expected in May, falling to the lowest level since September 2009.
Market sentiment remained somewhat supported by expectations that Ireland would pass a vote for the European Union’s fiscal treaty in a referendum on Thursday.
Elsewhere, the yield on Spanish 10-year bonds eased back to 6.51%, after climbing to a euro-era high of 6.7% on Wednesday as the lack of a convincing plan to recapitalize stricken lender Bankia fuelled fears that Madrid will be forced to seek an international bailout.
Elsewhere, sterling was lower against the euro with EUR/GBP rising 0.36%, to hit 0.8019.
Also Thursday, industry data showed that house prices in the U.K. rose more-than-expected in May, ticking up 0.3 after a 0.3% decline the previous month.
A separate report showed that an index of consumer confidence for the U.K. improved to minus 29 in May from a reading of minus 31 the previous month, beating expectations for a decline to minus 32.
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