Forex - GBP/USD rises to 1-1/2 week highs after U.S. data

The pound rose to one-and-a-half week highs against the U.S. dollar on Friday, after U.S. consumer sentiment data came out below expectations, although sustained optimism over the strength of the U.S. economic recovery still supported the greenback.

Pound hits 1-1/2 week highs vs. dollar

GBP/USD hit 1.6651 during U.S. morning trade, the pair's highest since March 19; the pair subsequently consolidated at 1.6635, adding 0.15%.

Cable was likely to find support at 1.6482, the low of March 25 and resistance at 1.6742, the high of March 10.

In a revised report, the University of Michigan said its consumer sentiment index ticked up to 80.0 in March, from a reading of 79.9 the previous month. Analysts had expected the index to rise to 80.5 this month.

Earlier Friday, official data showed that U.S. personal spending rose 0.3% in February, in line with expectations, Personal spending in January was revised down to a 0.2% gain from a previously estimated 0.4% increase.

A separate report showed that the core U.S. personal consumption expenditures price index remained unchanged at 0.1% last month, in line with expectations.

The dollar had strengthened broadly on Thursday after economic reports showed that U.S. jobless claims fell to the lowest level since late November last week and that U.S. economic fourth quarter growth was revised higher.

The upbeat data added to hopes that the slowdown in U.S. economic activity seen at the start of the year would be temporary.

In the U.K., data showed that the gross domestic product rose by 0.7% in the fourth quarter, in line with expectations.

A separate report showed that the U.K. current account deficit narrowed to £22.4 billion in the fourth quarter, from £22.8 billion in third quarter, whose figure was revised down from a previously estimated deficit of £20.7 billion.

Analysts had expected the current account deficit to narrow to £14 billion in the fourth quarter.

Sterling was fractionally higher against the euro, with EUR/GBP edging down 0.09% to 0.8264.

Also Friday, preliminary data showed that German consumer price inflation rose 0.3% in March, less than the expected 0.4% increase, after a 0.5% gain in February.

A separate report showed that French consumer spending rose 0.1% in February, less than the expected 0.8% increase, after a 2.1% decline the previous month.