Forex - GBP/USD extends gains on U.K. lending data

The pound extended Thursday's gains against the dollar into Friday better-than-expected U.K. lending data hit the wire and strengthened the currency, while the greenback edged lower amid sentiments that U.S. monetary policy will stay loose even after stimulus measures unwind.

In U.S. trading on Friday, GBP/USD was trading at 1.5259, up 0.23%, up from a session low of 1.5196 and off from a high of 1.5281.

Cable was likely to find support at 1.5196, the earlier low, and resistance at 1.5281, the earlier high.

Public-sector net borrowing in the U.K. fell less than expected in June, declining to GBP10.2 billion from GBP12.8 billion the previous month. 

Analysts had expected public sector net borrowing to fall to GBP9.5 billion last month, and the numbers provided support for the pound a day after a separate data revealed that U.K. retail sales rose 0.2% in June from May and were up 2.2% from June of last year.

Monthly retail sales met analysts' expectations though the on-year numbers beat market calls for  a 1.7% increase.

Meanwhile in the U.S., the dollar came under pressure after Federal Reserve Chairman Ben Bernanke told U.S. lawmakers in his semi-annual congressional testimony this week that monthly asset purchases will remain in place for the foreseeable future though they may begin to wind down later this year if the economy improves.

Bernanke stressed that an end to stimulus programs does not mean the Fed will quickly follow with tighter monetary policy such as hiking benchmark interest rates, which may remain at rock-bottom levels even when the country's monthly unemployment rate approaches 6.5%, a level the U.S. central bank has said it would like to see.

While the dollar firmed in recent sessions on sentiments that stimulus programs are on their way out in a matter of months to about a year, the currency weakened on Friday on expectations that the Fed may even delay such a decision should economic data disappoint.

The pound, meanwhile, was flat against the euro and up against the yen, with EUR/GBP unchanged at 0.8610 and GBP/JPY up 0.18% at 153.14.