Pound Advances Amid Better Than Expected U.K. GDP Data

(RTTNews) - The pound climbed against its major counterparts in European deals on Thursday, as the economy shrank less than expected in May.

Data from the Office for National Statistics showed that real gross domestic product decreased 0.1 percent on a monthly basis, reversing April's 0.2 percent growth. However, this was slower than economists' forecast of 0.3 percent decline.

On a yearly basis, GDP fell 0.4 percent, in contrast to the 0.5 percent expansion in April.

In three months to May, GDP showed no growth compared with the preceding period, while economists had forecast a 0.1 percent fall.

The currency was further supported by U.S. dollar weakness following softer-than-expected U.S. inflation data.

The data raised hopes that the Federal Reserve is nearing the conclusion of its monetary policy tightening cycle.

The pound rebounded to 1.1272 against the franc, from an early 1-1/2-month low of 1.1228. On the upside, 1.15 is possibly seen as its next resistance level.

The pound rose to 180.85 against the yen and 0.8547 against the euro, from its early lows of 179.49 and 0.8574, respectively. The currency is seen facing resistance around 184.00 against the yen and 0.84 against the euro.

The pound was up against the dollar, at more than a 1-year high of 1.3061. Next near term resistance for the currency is likely seen around the 1.32 level.

Looking ahead, at 7:30 am ET, the European Central Bank will publish the account of the monetary policy meeting of the governing council held on June 14 and 15.

In the New York session, U.S. PPI for June, U.S. weekly jobless claims data and U.S. Federal monthly budget balance report for June are slated for release.