Investing.com - The pound erased losses against the U.S. dollar on Monday, pulling back from the daily low as hopes that Wednesday's European summit will result in a viable solution to the euro zone's debt crisis supported demand for riskier assets.
GBP/USD rebounded from 1.5901, the daily low to hit 1.5993 during U.S. morning trade, rising 0.26%.
The pair was likely to find support at 1.5843, the low of September 9 and resistance at 1.6082, the high of September 8.
The pound found support, tracking the euro's gains as EU leaders seemed to be moving closer to an agreement on bank recapitalization on Sunday, while France and Germany neared a deal on enhancing the firepower of the euro zone's bailout fund.
But divisions over restructuring Greek debt remained and final decisions were deferred to Wednesday’s follow-up EU summit.
Market sentiment was hit earlier after preliminary data showed that manufacturing activity in the euro zone slumped to a 27-month low in October. Service sector output in the single-currency bloc also declined to a 27-month low, adding to fears that the euro zone could be slipping into a recession.
Elsewhere, the pound was down against the euro with EUR/GBP easing up 0.07%, to hit 0.8717.
Also Monday, the U.K. parliament debated calls for a referendum on Britain's membership of the EU, in what was being seen as a test of Prime Minister David Cameron’s authority.
GBP/USD rebounded from 1.5901, the daily low to hit 1.5993 during U.S. morning trade, rising 0.26%.
The pair was likely to find support at 1.5843, the low of September 9 and resistance at 1.6082, the high of September 8.
The pound found support, tracking the euro's gains as EU leaders seemed to be moving closer to an agreement on bank recapitalization on Sunday, while France and Germany neared a deal on enhancing the firepower of the euro zone's bailout fund.
But divisions over restructuring Greek debt remained and final decisions were deferred to Wednesday’s follow-up EU summit.
Market sentiment was hit earlier after preliminary data showed that manufacturing activity in the euro zone slumped to a 27-month low in October. Service sector output in the single-currency bloc also declined to a 27-month low, adding to fears that the euro zone could be slipping into a recession.
Elsewhere, the pound was down against the euro with EUR/GBP easing up 0.07%, to hit 0.8717.
Also Monday, the U.K. parliament debated calls for a referendum on Britain's membership of the EU, in what was being seen as a test of Prime Minister David Cameron’s authority.