Investing.com - The pound regained ground against the U.S. dollar on Tuesday, recovering from earlier losses due to data showing that British factory orders fell in January, after the International Monetary Fund raised its forecast for global economic growth.
GBP/USD hit 1.6486 during U.S. morning trade, the pair''s highest since January 13; the pair subsequently consolidated at 1.6458, rising 0.19%.
Cable was likely to find support at 1.6323, the low of January 15 and resistance at 1.6580, the high of December 31.
Earlier in the day, the Confederation of British Industry said its index of industrial order expectations fell to -2 this month from 12 in December, and below expectations of a reading of 10.
However, the CBI said the volume of total orders for the next three months rose to 22 from 14, the highest level since April 2012. New orders in the three months to January saw their strongest growth in nearly three years.
The data also showed that the quarterly business outlook balance ticked down to 21 in the three months to January from 24 in the three months to October, which had been its highest since April 2010.
Separately, demand for the pound strengthened after the IMF raised its forecast for global economic growth. However, it also warned that the pace of the recovery will remain “weak and uneven”.
The IMF said it expects the global economy to grow by 3.7% in 2014, which in October it said would expand by 3.6% this year.
Britain’s growth forecast was upgraded to 2.4% in 2014 from 1.9% in October, more than any other country, while its forecast for growth in 2015 was raised to 2.2%.
Meanwhile, demand for the dollar remained supported by expectations for a reduction to the Federal Reserve’s quantitative easing program at the outcome of its next policy meeting on January 29 to USD65 billion from the current USD75 billion.
Sterling was higher against the euro, with EUR/GBP shedding 0.34% to 0.8222.
Also Tuesday, the ZEW Centre for Economic Research said its index of German economic sentiment ticked down to 61.7 this month from 62.0 in December. Analysts had expected an increase to 64.0.
However, the current conditions index rose to a 20-month high of 41.2 from 32.4 in December, beating expectations for an increase to 34.1.
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