Forex - GBP/USD edges higher after positive U.K. data

The pound edged higher against the U.S. dollar in thin trade on Friday, supported by the release of positive U.K. public sector borrowing data, although investors remained cautious amid renewed concerns over U.S. debt troubles. 

GBP/USD hit 1.6066 during European morning trade, the session high; the pair subsequently consolidated at 1.6053, adding 0.13%. 

Cable was likely to find support at 1.5893, the low of September 18 and resistance at 1.6146, Thursday's high. 

Official data showed that U.K. public sector net borrowing rose less-than-expected in August, rising by GBP11.5 billion after a downwardly revised 1.1% decline the previous month. Analysts had expected public sector net borrowing to rise by GBP12 billion last month. 

But markets were jittery as U.S. Republicans and Democrats must quickly decide on how to continue funding the government and whether to increase the government's borrowing authority by raising the debt ceiling. 

If President Barack Obama's administration and Republicans do not come to an agreement to raise the nation's borrowing cap before October, the U.S. Treasury may be able to avoid exceeding the USD16.7 trillion debt limit, which could send the country into default. 

Sterling was also higher against the euro with EUR/GBP slipping 0.15%, to hit 0.8428. 

Sentiment on the single currency was fragile ahead of the outcome of Germany's general election on Sunday, with Chancellor Angela Merkel looking to secure a third term. 

Trading volumes were expected to remain light on Friday, as no U.S. economic data was to be released throughout the session.