Investing.com - The pound moved sharply higher against the U.S. dollar on Thursday, as market sentiment was boosted after European Central Bank President Mario Draghi said the bank will do whatever is necessary to preserve the euro.
GBP/USD hit 1.5650 during European afternoon trade, the pair’s highest since July 20; the pair subsequently consolidated at 1.5649, gaining 0.97%.
Cable was likely to find support at 1.5469, the session low and resistance at 1.5723, the high of July 20.
In a speech in London, Draghi also appeared to indicate that the ECB would be prepared to intervene to lower Spanish and Italian bond yields, saying that government borrowing costs would fall within the central bank’s mandate if they interfered with the 'transmission' of monetary policy.
The yield on Spanish 10-year bonds dropped back to 7.03% from a session high of 7.38% following the remarks, while the yield on Italian 10-year bonds pulled back to 6.07%.
The pound was down against the greenback earlier in the session after data on Wednesday showed that the U.K. economy contracted by the most since the first quarter of 2009 in the three months to June.
The weak data boosted expectations for a further round of quantitative easing by the Bank of England and fuelled fears that the U.K.’s triple A sovereign rating could be downgraded.
Sterling was fractionally higher against the euro, with EUR/GBP dipping 0.08% to 0.7837.
Later Thursday, the U.S. was to release official data on durable goods orders and initial jobless claims, as well as industry data on pending home sales.
GBP/USD hit 1.5650 during European afternoon trade, the pair’s highest since July 20; the pair subsequently consolidated at 1.5649, gaining 0.97%.
Cable was likely to find support at 1.5469, the session low and resistance at 1.5723, the high of July 20.
In a speech in London, Draghi also appeared to indicate that the ECB would be prepared to intervene to lower Spanish and Italian bond yields, saying that government borrowing costs would fall within the central bank’s mandate if they interfered with the 'transmission' of monetary policy.
The yield on Spanish 10-year bonds dropped back to 7.03% from a session high of 7.38% following the remarks, while the yield on Italian 10-year bonds pulled back to 6.07%.
The pound was down against the greenback earlier in the session after data on Wednesday showed that the U.K. economy contracted by the most since the first quarter of 2009 in the three months to June.
The weak data boosted expectations for a further round of quantitative easing by the Bank of England and fuelled fears that the U.K.’s triple A sovereign rating could be downgraded.
Sterling was fractionally higher against the euro, with EUR/GBP dipping 0.08% to 0.7837.
Later Thursday, the U.S. was to release official data on durable goods orders and initial jobless claims, as well as industry data on pending home sales.