Forex - GBP/USD Rises Above 1.63 on Global Economic Outlook

Forexpros – The pound was up against the U.S. dollar on Monday, trading close to a three-day high as better-than-expected Japanese economic data helped ease fears over the global economic outlook.

GBP/USD hit 1.6307 during early European trade, the daily high; the pair subsequently consolidated at 1.6301, gaining 0.13%.

Cable was likely to find support at 1.6165, last Friday’s low and resistance at 1.6409, the high of August 9.

Preliminary data released earlier in the day showed that Japan’s economy contracted less-than-expected in the second quarter, signaling the country is rebounding from March’s earthquake disaster at a faster rate than expected.

Japan’s gross domestic shrank by 0.3% in the second quarter, or 1.3% on an annualized basis. Analysts had expected Japan’s economy to contract by 0.9% in the quarter, or 2.5% on an annualized basis.

Meanwhile, government data released Friday showed that U.S. retail sales rose by 0.5% in July, the biggest gain in four months, easing fears over the pace of the U.S. economic recovery.

Markets were also awaiting Tuesday’s meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy, to further asses the euro zone’s debt crisis and how officials plan to handle escalating threats of contagion.

Elsewhere, the pound was down against the euro, with EUR/GBP gaining 0.37% to hit 0.8787.

Earlier in the day, industry group Rightmove said that U.K. home prices fell by 2.1% in August, the second consecutive monthly decline and the largest since December.

Home prices in London slumped 3.4% from the previous month, as demand in Britain’s most expensive property market was hit by turmoil in financial markets.

“Prices often fall back at this time of year, but the renewed turmoil in global financial markets may be starting to hit home with London buyers who have thus far been insulated from the worst of the downturn,” Rightmove said.

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