GBP/USD advanced on better than projected GDP

British pound recorded gains against the US dollar on Friday, following the release of upbeat UK GDP data, while markets awaited US new home sales later in the day.

GBP/USD rose to a session high at 1.5636 at 8:37 GMT, the pairs highest point since August 21st, after which consolidation followed at 1.5632, gaining 0.32% for the day. Support for the cross was to be received at August 22nd low, 1.5562, while resistance was to be encountered at August 21st high, 1.5718.

An official report by the Office for National Statistics (ONS) revealed that UK economy grew by 0.7% during the second quarter of the year compared to the first quarter, exceeding expectations of a 0.6% gain. In annual terms, the preliminary value of UK Gross Domestic Product increased by 1.5% in Q2, a revision up from the 1.4% gain, as reported initially on July 25th. Experts had anticipated a 1.4% increase in GDP. Net trade has had a significant positive influence on growth results for a second quarter in a row. Remuneration packages rose by 2.4% during the second quarter, marking their largest quarterly climb since Q3 2000.

Additionally, British Bankers Association (BBA) said that mortgage approvals increased in number less than anticipated in July, by 37 200 instead of 39 000. Junes number of approvals was revised up to 37 337 from 37 278 previously.

Also, total business investments in the United Kingdom rose by 0.9% during Q2 compared to Q1 this year, outpacing preliminary estimates of a 0.6% climb, following the 1.9% drop in the first three months of the year. Annually, business investments recorded a 3.5% drop in Q2, after the 16.5% slump in the preceding quarter.

Meanwhile, uncertainty over the future of Federal Reserve Banks stimulus program was given a boost after yesterday the Department of Labor reported that initial jobless claims in the United States rose by 13 000 to 336 000 during the week ending on August 17th 2013, as experts had anticipated a lesser increase in the number of claims, to 330 000.

Elsewhere, the sterling was trading higher against the euro, with EUR/GBP cross decreasing by 0.11% to 0.8561 at 9:36 GMT. Pound was gaining ground against the Japanese currency as well, with GBP/JPY pair up by 0.39% to trade at 154.52 at 9:37 GMT.