Investing.com - The pound erased gains against the U.S. dollar on Wednesday, pulling back from a session high as sustained concerns over a potential Greek default weighed on demand for riskier assets.
GBP/USD pulled back from 1.5736, the daily high, to hit 1.5687 during U.S. morning trade, edging down 0.08%.
Cable was likely to find support at 1.5641, the low of January 27 and resistance at 1.5736, the day’s high.
Sentiment waned after Reuters reported that European Union officials are looking at ways to delay Greece’s second bailout and still avoid a default amid concerns that political leaders in Athens are not fully committed to implementing harsh austerity measures demanded by international creditors.
Without a bailout, Greece faces the threat of defaulting when a EUR14.5 billion bond redemption comes due on March 20.
In the U.K., the Bank of England’s February inflation report dampened expectations for further quantitative easing earlier after the bank raised its inflation forecast for two years time to a higher-than-expected 1.8% up from 1.3% in November's report.
But the pound remained under pressure after BoE Governor Mervyn King said that economic growth is likely to alternate between expansion and contraction in 2012 and warned that the euro zone crisis remains the biggest threat to the U.K. economic recovery.
Also Wednesday, a report showed that the number of people claiming unemployment benefits in the U.K. rose more-than-expected in January, while the unemployment rate held steady at 8.4%, the highest level since 1996.
Elsewhere, the pound was higher against the euro with EUR/GBP declining 0.37%, to hit 0.8337.
In the U.S., a report showed that manufacturing in the New York region expanded at the fastest rate since June 2010 in February.
A separate report showed that industrial production in the U.S. was unexpectedly flat in January.
Later in the day, the Federal Reserve was to publish the minutes of its most recent policy-setting meeting.
GBP/USD pulled back from 1.5736, the daily high, to hit 1.5687 during U.S. morning trade, edging down 0.08%.
Cable was likely to find support at 1.5641, the low of January 27 and resistance at 1.5736, the day’s high.
Sentiment waned after Reuters reported that European Union officials are looking at ways to delay Greece’s second bailout and still avoid a default amid concerns that political leaders in Athens are not fully committed to implementing harsh austerity measures demanded by international creditors.
Without a bailout, Greece faces the threat of defaulting when a EUR14.5 billion bond redemption comes due on March 20.
In the U.K., the Bank of England’s February inflation report dampened expectations for further quantitative easing earlier after the bank raised its inflation forecast for two years time to a higher-than-expected 1.8% up from 1.3% in November's report.
But the pound remained under pressure after BoE Governor Mervyn King said that economic growth is likely to alternate between expansion and contraction in 2012 and warned that the euro zone crisis remains the biggest threat to the U.K. economic recovery.
Also Wednesday, a report showed that the number of people claiming unemployment benefits in the U.K. rose more-than-expected in January, while the unemployment rate held steady at 8.4%, the highest level since 1996.
Elsewhere, the pound was higher against the euro with EUR/GBP declining 0.37%, to hit 0.8337.
In the U.S., a report showed that manufacturing in the New York region expanded at the fastest rate since June 2010 in February.
A separate report showed that industrial production in the U.S. was unexpectedly flat in January.
Later in the day, the Federal Reserve was to publish the minutes of its most recent policy-setting meeting.