Investing.com - The pound edged higher against the U.S. dollar on Monday, but gains were expected to remain limited as sustained optimism over the U.S. economic recovery continued to lend broad support to the greenback.
Trading volumes were expected to remain light this week ahead of the New Year's holiday.
GBP/USD hit 1.5586 during European morning trade, the pair's highest since December 23; the pair subsequently consolidated at 1.5573, adding 0.10%.
Cable was likely to find support at 1.5501, the low of December 24 and resistance at 1.5667, the high of December 22.
The dollar remained broadly supported after final data last week showed that U.S. gross domestic product rose 5.0% in the third quarter, exceeding expectations for a growth rate of 4.3% and up from 3.9% in the three months to June.
The strong data fuelled further optimism over the strength of the U.S. economic recovery and added to expectations for the Federal Reserve to raise interest rates next year.
The pound found some support after data on Friday showed that U.K. GDP rose 0.7% in the third quarter, in line with expectations and down from a 0.8% growth rate in the three months to June.
Year-on-year, the U.K. economy grew at a rate of 3.6% in the last quarter, above expectations for growth of 3.0% and unchanged from the second quarter's revised rate.
Sterling was steady against the euro, with EUR/GBP dipping 0.01% to 0.7830.