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GBP/USD Erases Gains After U.K. Trade Deficit Rises To Record
Written by article default Wednesday, 09 February 2011 14:16
The pound erased gains against the U.S. dollar on Wednesday, after official data showed that the U.K.’s goods trade deficit widened again in December from November’s record gap.GBP/USD retreated from 1.61, the daily high, to hit 1.606 during European late morning trade, dipping 0.04%.
Cable was likely to find support at 1.6027, Tuesday’s low and a one-week low and resistance at 1.6161, Tuesday’s high.
The Office for National Statistics said that Britain’s goods trade gap widened to GBP9.2 billion from GBP8.4 billion in November. Economists had forecast a broadly steady reading of GBP8.6 billion pounds.
Excluding volatile trade in oil and goods such as aircraft, Britain’s goods trade deficit rose to GBP8.1 billion from GBP7.3 billion, its highest since monthly records began in 1980.
The total trade deficit, which includes services, deteriorated to its worst level since August 2005, increasing to GBP4.8 billion from GBP3.9 billion.
The pound was also lower against the euro, with EUR/GBP rising 0.1% to hit 0.8487.
Later in the day, the head of the U.S. Federal Reserve, Ben Bernanke was to testify before the Budget Committee in Washington.