Forexpros – The pound extended against the U.S. dollar on Thursday, after positive U.K. manufacturing data added to hopes for economic growth in the first quarter and amid diminished expectations for further monetary easing in the U.S.
GBP/USD hit 1.5960 during European afternoon trade, the daily high; the pair subsequently consolidated at 15943, gaining 0.18%.
Cable was likely to find support at 1.5880, the low of November 14 and resistance at 1.5991, Wednesday’s high.
Data showed earlier that the manufacturing sector in the U.K. grew in February, albeit at a slightly slower-than-forecast pace.
Markit research group said that its U.K. manufacturing purchasing managers’ index dipped to a seasonally adjusted 51.2 in February from a reading of 52.0 in January, whose figure was revised down from 52.1, which was an eight-month high.
Analysts had expected the manufacturing PMI to hold steady at 52.0.
Earlier in the day, a separate report showed that U.K. house prices rose more-than-expected in February, after dropping unexpectedly the previous month.
But the pound’s gains were limited as concerns over the effectiveness of the European Central Bank’s liquidity boosting operation on Wednesday weighed.
Meanwhile, the greenback remained supported as Federal Reserve Chairman Ben Bernanke dampened expectations on Wednesday for a third round of monetary easing after he acknowledged the recent improvement in the labor market and said that higher oil prices could push up inflation.
Elsewhere, the pound was higher against the euro with EUR/GBP sliding 0.32%, to hit 0.8345.
Later in the day, the U.S. was to release government data on unemployment claims, while the Institute for Supply Management was to produce a report on manufacturing activity. In addition, Ben Bernanke was due to testify for a second day before Congress.
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