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Pound Advances After U.K. GDP Data

05:30, 24th October 2014

(RTTNews) - The pound strengthened against the other major currencies in the European session on Friday after data showed that U.K. economy grew in line with economists' expectation in the third quarter.

Data from the Office for National Statistics showed that gross domestic product climbed 0.7 percent from the second quarter, when it grew 0.9 percent. The sequential growth rate matched economists' expectations.

As expected, GDP was 3 percent higher in the third quarter compared with the same quarter a year ago. GDP was estimated to be 3.4 percent higher than the pre-economic downturn peak of the first quarter of 2008.

Another report today showed that the Index of Services increased by 3.1 percent in August from last year. All of the four main components of the services industries increased compared with the same month a year ago.

In the Asian trading, the pound held steady against the other major currencies.

In the European session, the pound rose to a 2-week high of 173.89 against the yen and a 2-day high of 1.6071 against the greenback, from early lows of 172.95 and 1.6016, respectively. At yesterday's close, the pound was trading at 173.52 against the yen and 1.6026 against the greenback. If the pound extends its uptrend, it is likely to find resistance around 176.56 against the yen and 1.62 against the greenback.

Against the euro and the Swiss franc, the pound edged up to 0.7872 and 1.5317, from early lows of 0.7898 and 1.5271, respectively. The pound closed yesterday's deals at 0.7885 against the euro and 1.5291 against the franc. The pound may test resistance near 0.77 against the euro and 1.54 against the Swiss franc.

Looking ahead, U.S. home sales data for September is due to be released in the New York session.

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