Forexpros – The pound extended gains against the U.S. dollar on Thursday, after overall positive U.S. economic data supported market sentiment amid diminished expectations for further monetary easing by the Federal Reserve.
GBP/USD hit 1.5960 during U.S. morning trade, the daily high; the pair subsequently consolidated at 1.5966, gaining 0.31%.
Cable was likely to find support at 1.5880, the low of November 14 and resistance at 1.5991, Wednesday’s high.
The U.S. Department of Labor said earlier that initial claims for state unemployment benefits fell to 351,000, holding steady near the lowest level since March 2008.
Separate reports showed that the U.S. core personal consumption expenditure index rose broadly in line with market expectations in January, while personal spending and personal income both rose less-than-expected.
However, the U.S. Institute for Supply Management said that its purchasing managers’ index fell unexpectedly to 52.4 in February from a reading of 54.1 in January.
The data came one day after Federal Reserve Chairman Ben Bernanke dampened expectations for a third round of monetary easing in testimony before Congress, after he acknowledged the recent improvement in the labor market and said that higher oil prices could push up inflation.
Sterling found support earlier after data showed the U.K. manufacturing sector grew in February, albeit at a slightly slower-than-forecast pace, adding to hopes that the sector will fuel overall economic growth in the first quarter.
A separate report showed that U.K. house prices rose more-than-expected in February, after dropping unexpectedly the previous month.
Sentiment was also supported after the International Swaps and Derivatives Association ruled that no “credit event” was triggered by Greece’s debt restructuring efforts.
Elsewhere, the pound was higher against the euro with EUR/GBP sliding 0.26%, to hit 0.8350.
Later in the day, Ben Bernanke was due to testify for a second day before Congress.
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