GBP/USD erased earlier gains on upbeat US data

The sterling vanquished earlier gains against the US dollar on Thursday, following the release of strong economic data out of the United States, despite that Bank of Englands decision on policy still supported the pound.

GBP/USD fell off the highest point for this session, 1.5245, to reach 1.5147, marking a 0.40% daily loss. Support was expected at July 16th low, 1.5046, while resistance was to be met at July 31st high, 1.5254.

The Institute of Supply Management in the United States said that business activity in the sector of manufacturing rose to 55.4 in July, up from 50.9 in June, marking the highest point since August 2011. Experts had expected that the indicator will show a much lesser increase to 52.0.

Before that, the Department of Labor reported that initial jobless claims fell by 19 000 to 326 000, which was the lowest number of claims since the beginning of 2008, considerably outstripping initial estimates that claims will reach 345 000.

On Wednesday, the Federal Reserve Bank announced that it would keep its 85-billion-USD-a-month purchases of mortgage and Treasury securities and stressed that the rate of economic growth in the United States was “modest”.

Meanwhile, earlier today the pound received support after Bank of England left its base interest rate unchanged at 0.50% and kept the size of monetary stimulus at 375 billion GBP at Mark Carney’s first meeting as Governor. Additionally, a separate report said that British Manufacturing PMI rose to 54.6 in July after 52.9 in June, which was a revision up from 52.5 previously. Experts had projected that the index will reach 52.8.

Elsewhere, the sterling advanced against the euro, as EUR/GBP fell by 0.21% to 0.8727. At the same time, the British currency soared against the Japanese yen, with GBP/JPY cross climbing 1.04% to trade at 150.44.