Investing.com - The pound edged higher against the U.S. dollar in subdued holiday trade on Monday, as demand for the greenback weakened after data showed that U.S. pending home sales rose less-than-expected last month.
GBP/USD hit 1.6504 during U.S. morning trade, the session high; the pair subsequently consolidated at 1.6508, adding 0.18%.
Cable was likely to find support at 1.6407, Friday's low and resistance at 1.6578, Friday's high and a 28-month high.
The dollar came under pressure after the U.S. National Association of Realtors said its pending home sales index increased by a seasonally adjusted 0.2% last month, disappointing expectations for a 1% gain. Pending home sales for October were revised to a 1.2% decline from a previously reported drop of 0.6%.
But the greenback's losses were expected to remain limited amid expectations for further stimulus tapering by the Federal Reserve. The U.S. central bank will start reducing its bond-buying stimulus program by USD10 billion a month in January, amid indications of an improving U.S. economy.
Meanwhile, market sentiment remained supported after European Central Bank Governing Council member Jens Weidmann on Friday said keeping interest rates low may endanger political reforms.
According to Germany’s Bild newspaper, Weidmann said low inflation shouldn’t be used to justify loose monetary policy. "We must take care to raise interest rates again in a timely manner should inflation pressures build," he reportedly added.
The pound was lower against the euro, with EUR/GBP rising 0.26% to 0.8362.
Also Monday, Italy’s Treasury sold EUR3 billion worth of ten-year debt at an average yield of 4.11%, up from 4.01% at a similar auction last month. The yield on Italian 10-year bonds stood at 4.163% following the auction.
GBP/USD hit 1.6504 during U.S. morning trade, the session high; the pair subsequently consolidated at 1.6508, adding 0.18%.
Cable was likely to find support at 1.6407, Friday's low and resistance at 1.6578, Friday's high and a 28-month high.
The dollar came under pressure after the U.S. National Association of Realtors said its pending home sales index increased by a seasonally adjusted 0.2% last month, disappointing expectations for a 1% gain. Pending home sales for October were revised to a 1.2% decline from a previously reported drop of 0.6%.
But the greenback's losses were expected to remain limited amid expectations for further stimulus tapering by the Federal Reserve. The U.S. central bank will start reducing its bond-buying stimulus program by USD10 billion a month in January, amid indications of an improving U.S. economy.
Meanwhile, market sentiment remained supported after European Central Bank Governing Council member Jens Weidmann on Friday said keeping interest rates low may endanger political reforms.
According to Germany’s Bild newspaper, Weidmann said low inflation shouldn’t be used to justify loose monetary policy. "We must take care to raise interest rates again in a timely manner should inflation pressures build," he reportedly added.
The pound was lower against the euro, with EUR/GBP rising 0.26% to 0.8362.
Also Monday, Italy’s Treasury sold EUR3 billion worth of ten-year debt at an average yield of 4.11%, up from 4.01% at a similar auction last month. The yield on Italian 10-year bonds stood at 4.163% following the auction.