Investing.com – The pound erased gains against the U.S. dollar on Tuesday, after St. Louis Federal Reserve President James Bullard said that normalization in U.S. monetary policy will be a key theme this year.
GBP/USD hit 1.5943 during European early afternoon trade, the daily low; the pair subsequently consolidated at 1.5957, shedding 0.20%.
Cable was likely to find short-term support at 1.5936, Monday’s low and a two-month low and resistance at 1.6141, last Friday’s high.
Speaking at an economic conference in Prague, Bullard said the Federal Reserve's USD600 billion asset purchase program could be trimmed by some USD100 billion.
"We are fueling the fire right now, and it needs to be turned around," he said.
Bullard also said that said U.S. policymakers may not be willing or able to wait for global uncertainties to be resolved before they begin normalizing monetary policy and warned that waiting too long to tighten policy may produce "a lot of inflation" in the United States and around the world.
The pound was also lower against the euro, with EUR/GBP easing up 0.05% to hit 0.8813.
Also Tuesday, official data showed that while the U.K. economy shrank less-than-expected in the fourth quarter of 2010, the new figure was still the biggest decline since the second quarter of 2009.
GBP/USD hit 1.5943 during European early afternoon trade, the daily low; the pair subsequently consolidated at 1.5957, shedding 0.20%.
Cable was likely to find short-term support at 1.5936, Monday’s low and a two-month low and resistance at 1.6141, last Friday’s high.
Speaking at an economic conference in Prague, Bullard said the Federal Reserve's USD600 billion asset purchase program could be trimmed by some USD100 billion.
"We are fueling the fire right now, and it needs to be turned around," he said.
Bullard also said that said U.S. policymakers may not be willing or able to wait for global uncertainties to be resolved before they begin normalizing monetary policy and warned that waiting too long to tighten policy may produce "a lot of inflation" in the United States and around the world.
The pound was also lower against the euro, with EUR/GBP easing up 0.05% to hit 0.8813.
Also Tuesday, official data showed that while the U.K. economy shrank less-than-expected in the fourth quarter of 2010, the new figure was still the biggest decline since the second quarter of 2009.