Investing.com - The pound remained near 29-month highs against the U.S. dollar on Thursday, after the release of disappointing U.S. economic reports weighed on the greenback, while expectations for the Bank of England to raise interest rates sooner than expected boosted demand for sterling.
GBP/USD hit 1.6620 during U.S. morning trade, the highest level since August 2011; the pair subsequently consolidated at 1.6607, adding 0.20%.
Cable was likely to find support at 1.6449, Wednesday’s low and resistance at 1.6725.
Data showed that U.S. initial jobless claims rose in line with expectations last week, but the number of continuing jobless claims remained above the three million mark for the second successive week.
The number of people who filed for unemployment assistance in the U.S. last week rose to 326,000, the Labor Department said, up from the previous week’s revised total of 325,000.
However, the number of people filing continuing unemployment claims rose to 3.056 million up from 3.022 million in the week to January 11. Analysts had expected continuing claims to fall to 2.930 million.
A separate report showed that U.S. factory output fell to a three-month low in January, due to disruption from unseasonable cold weather.
The U.S. manufacturing purchasing managers'' index declined to 53.7 this month from a final reading of 55.0 in December. Analysts had expected the index to hold steady.
In addition, data showed that U.S. existing home sales increased 1% to 4.87 million units last month from 4.82 million in November, undershooting expectations for an increase to 4.94 million.
Meanwhile, the pound remained supported after data on Wednesday showed that the rate of unemployment in the U.K. fell to 7.1% in the three months to November, to stand just above the 7% level the BoE has said is its threshold for considering raising interest rates from their current record low of 0.5%.
But the minutes of the BoE’s January meeting, also published on Wednesday, stressed that the bank is in no rush to act.
The pound shrugged off private sector data on Thursday showing that retail sales growth slowed this month. The Confederation of British Industry said its index of U.K. retailers fell to 14.0 this month from 34.0 in December. Analysts had expected the index to decline to 25.0 in January.
Sterling was lower against the euro, with EUR/GBP climbing 0.75% to 0.8235.
Also Thursday, Markit said the euro zone’s composite output index rose to a 31-month high of 53.2 in January, up from a final reading of 52.1 in December, as growth picked up in Germany and the rate of decline eased in France.
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