Investing.com - The pound edged up to nearly two-and-a-half week highs against the U.S. dollar on Friday, as market sentiment improved with positive news on the Greek debt front and as growing expectations for a U.K. rate hike continued to support demand for sterling.
GBP/USD hit 1.5671 during European morning trade, the pair's highest since Wednesday; the pair subsequently consolidated at 1.5655, adding 0.29%.
Cable was likely to find support at 1.5448, the low of July 14 and resistance at 1.5736, the high of July 1.
Market sentiment strengthened after euro zone ministers agreed on Thursday to give Greece a €7 billion bridging loan from a European Union-wide fund to keep its finances afloat until a bailout is approved.
The loan was expected to be confirmed on Friday by all EU member states.
The news came after the European Central Bank increased its emergency lending to Greek banks by €900 million and added that it is operating under the assumption that Greece will remain in the euro zone.
The pound was also boosted after Bank of England Governor Mark Carney said earlier in the week that the time for rate increases is moving closer.
In testimony to the Treasury Committee in Westminster on Tuesday, Carney said that "the point at which interest rates may begin to rise is moving closer with the performance of the economy, consistent growth above trend, a firming in domestic costs, counter balanced somewhat by disinflation imported from abroad."
He also reiterated that rate hikes when they do come will be gradual.
Meanwhile, the dollar's losses were expected to remain limited as Federal Reserve Chair Janet Yellen's two-day testimony before U.S. Congress left investors believing that interest rates will be raised later this year.
However, speaking to the Senate Banking Committee on Thursday, a day after appearing before the House Financial Services Committee, Yellen again avoided specifying exactly when the Fed is likely to start lifting its benchmark rate from near zero.
Sterling was fractionally higher against the euro, with EUR/GBP edging down 0.09% to 0.6961.