GBP/USD close to session highs following UK data, gains capped

British pound gradually advanced against the US dollar on Friday, but gains seemed capped, following the weak Public Sector Net Borrowing data, released from the United Kingdom today.

GBP/USD cross reached a session high at 1.5257 at 9:01 GMT, the highest point since July 17th, after which consolidation followed at 1.5245, still on positive territory by 0.14%. Support was likely to be received at July 18th low, 1.5158, while resistance was to be met at July 3rd high, 1.5304.

Earlier on Friday it became clear that Public Sector Net Borrowing (PSNB) in the United Kingdom recorded a larger deficit in June than projected, 10.2 billion GBP, compared to 9.4 billion GBP, while data in May was revised down to a 12.8 billion GBP deficit from 10.5 billion GBP previously. Additionally, Public Sector Net Cash Requirement (PSNCR) indicator increased slightly in June to 3.1 billion GBP from 3.0 billion GBP a month ago.

Meanwhile, in his second day of testimony on monetary policy before the Financial Services Committee in US Congress, FED Chairman Ben Bernanke reiterated that monetary policy will remain accommodative in the foreseeable future, even as the central bank begins to scale back its asset purchasing program. FED’s Quantitative Easing could be tapered at a faster pace, slower pace or even temporarily increased, if economic conditions allowed so.

The sterling traded higher against the euro, with EUR/GBP cross decreasing by 0.20% to 0.8595 at 9:26 GMT.

Market players turned their attention to the outcome of the G-20 meeting, held throughout the whole day in Russia.