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Forex - GBP/USD hits 4-week high as risk sentiment strengthens

Published 05/31/2011, 04:12 AM
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Investing.com – The pound was up against the U.S. dollar on Tuesday, rising to a four-week high as concerns over a Greek sovereign debt default eased, boosting demand for higher yielding assets.

GBP/USD hit 1.6547 during European morning trade, the pair’s highest since May 4; the pair subsequently consolidated at 1.6516, gaining 0.25%.

Cable was likely to find support at 1.6377, last Friday’s low and short-term resistance at 1.6573, the high of May 4.

Earlier in the day, the Wall Street Journal reported that Germany was considering dropping its push for a rescheduling of Greek bonds to facilitate a new package of aid loans to the country.

The European Union is drafting a second bailout package for Greece to release vital loans next month and avert the risk of it defaulting after the International Monetary Fund said it would withhold the next tranche of aid to Greece in June unless the EU guaranteed to meet Athens' funding needs for next year.

Meanwhile, the pound was lower against the euro, with EUR/GBP rising 0.60% to hit 0.8721.

Later Tuesday, the U.S. was to publish industry data on house price inflation and consumer confidence, as well as an index of manufacturing activity in the Chicago area.

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