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Forex - GBP/USD steady ahead of critical EU summit

Published 10/26/2011, 05:11 AM
GBP/USD
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EUR/GBP
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Investing.com – The pound was steady against the U.S. dollar on Wednesday, finding support close to a seven-week high ahead of a keenly anticipated European Union summit meeting.

GBP/USD pulled back from 1.6041, the pair’s highest since September 8, to hit 1.5998 during European morning trade, unchanged on the day.

Cable was likely to find support at 1.5899, Monday’s low and resistance at 1.6041, the day’s high.

Expectations for a breakthrough on dealing with the debt crisis in the euro zone at the summit were dented after a meeting of the region’s finance ministers, scheduled to take place ahead of the summit, was cancelled.

The pound remained vulnerable amid concerns over the outlook for growth in the U.K. economy after the Bank of England implemented a new round of quantitative easing earlier this month.

On Tuesday, BoE Governor Mervyn King said policymakers had come very close to implementing stimulus measures last month but held off to see if volatility in financial markets would subside, before taking the decision to resume in October.

Meanwhile, the pound was lower against the euro, with EUR/GBP rising 0.20% to hit 0.8710.

Later Wednesday, the U.S. was to release government data on durable goods orders, as well as official data on new home sales and crude oil stockpiles.

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