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Pound Higher As U.K. Consumer Credit, Business Lending Improves

05:56, 24th August 2016

(RTTNews) - The pound climbed against its key counterparts in European trading on Wednesday, as data showing improvement in U.K. consumer credit and business lending in July suggested that the Brexit vote had little impact on borrowing patterns among consumers and businesses.

Data from the British Bankers' Association showed that consumer credit continued to show annual growth of over 6 percent, reflecting strong retail sales and in the case of personal loans and overdrafts favorable interest rates.

Business lending jumped by GBP 2.3 billion in the month, the largest increase since January.

Meanwhile, U.K. mortgage approvals declined to the lowest level since early 2015, with a slide to 37,662 in July from 39,763 in June.

The pound showed mixed performance in Asian deals. While the currency held steady against the euro and the franc, it declined against the greenback. Against the yen, the pound rose.

The pound appreciated to 1.3254 against the greenback, its highest since August 4. This marks a 0.4 percent increase from yesterday's closing value of 1.3197. The pound is seen finding resistance around the 1.34 mark.

Reversing from an early low of 1.2687 against the Swiss franc, the pound advanced to a new 2-week high of 1.2820.On the upside, the pound is likely to challenge resistance around the 1.30 level.

The pound drifted higher to a new 2-week high of 133.13 against the Japanese yen, off its early low of 131.97. If the pound extends rise, 135.00 is possibly seen as its next resistance level.

Figures from the Cabinet Office showed that Japan's leading index, which measures the future economic activity, increased in June instead of a stable reading reported initially.

The leading index rose to 99.2 in June from 98.4 in the previous month. The June figure was revised up from 98.4.

The pound added 1 percent to hit a new 2-week high of 0.8492 against the euro, following a low of 0.8579 hit at 3:00 am ET. Continuation of the pound's uptrend may see it challenging resistance around the 0.83 area.

Data from Destatis showed that Germany's economy continued to expand in the second quarter but the pace growth eased as estimated.

Gross domestic product climbed 0.4 percent quarter-on-quarter, in line with preliminary estimate, and slower than the 0.7 percent expansion seen in the March quarter.

Looking ahead, U.S. existing home sales data for July and crude oil inventories data are set to be published shortly.

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