Forex Pros – The pound extended gains against the U.S. dollar on Wednesday, after official data showed that the U.K. goods trade deficit narrowed in January to its smallest in nearly a year, recovering from its worst reading on record in December.
GBP/USD hit 1.6205 during European morning trade, the daily high; the pair subsequently consolidated at 1.6189, gaining 0.17%.
Cable was likely to find support at 1.6255, the low of February 28 and resistance at 1.6304, Friday’s high.
The Office for National Statistics said that the country’s goods trade deficit narrowed to GBP7.0 billion from an upwardly revised GBP9.6 billion in December. Economists had forecast a deficit of GBP8.5 billion pounds.
The report said the improvement was largely due to record levels of exports of oil, food, drink and tobacco. Excluding oil and volatile items, exports rose 6.1% on the month, while import volumes rose 1.9%.
The pound was also higher against the euro, with EUR/GBP shedding 0.32% to hit 0.8574.
Also Wednesday, a report said that British shop inflation rose to its highest since November 2008 after January’s sales tax hike.
The BRC-Nielsen shop price index increased 2.7% year-on-year in February, faster than the 2.5% rise in January.
ForexPros.com
