Investing.com - The pound erased gains against the U.S. dollar on Friday, as fresh U.S. debt concerns weighed on demand for risk-related assets, overshadowing recent news that the Federal Reserve is still not tapering its stimulus program.
GBP/USD pulled away from 1.6066, the session high, to hit 1.6014 during U.S. morning trade, slipping 0.11%.
Cable was likely to find support at 1.5893, the low of September 18 and resistance at 1.6146, Thursday's high.
Market sentiment weakened as U.S. Republicans and Democrats were forced to quickly decide on how to continue funding the government and whether to increase the government's borrowing authority by raising the debt ceiling.
If President Barack Obama's administration and Republicans do not come to an agreement to raise the nation's borrowing cap before October, the U.S. Treasury may be able to avoid exceeding the USD16.7 trillion debt limit, which could send the country into default.
Separately, the greenback found some support after St. Louis Fed President James Bullard said on Friday that the U.S. central bank could taper its stimulus program during its October meeting.
The comments came after the Fed on Wednesday held back from reducing the USD85 billion pace of its monthly asset purchases.
Fed Chairman Ben Bernanke refused to commit to reducing bond purchases this year, saying the stimulus program was "not on a preset course."
Earlier Friday, official data showed that U.K. public sector net borrowing rose less-than-expected in August, rising by GBP11.5 billion after a downwardly revised 1.1% decline the previous month. Analysts had expected public sector net borrowing to rise by GBP12 billion last month.
Sterling was steady against the euro with EUR/GBP inching 0.07% higher, to hit 0.8446.
In the euro zone, investors were eyeing the outcome of Germany's general election on Sunday., with Chancellor Angela Merkel looking to secure a third term.
Trading volumes were expected to remain light on Friday, as no U.S. economic data was to be released throughout the session.
GBP/USD pulled away from 1.6066, the session high, to hit 1.6014 during U.S. morning trade, slipping 0.11%.
Cable was likely to find support at 1.5893, the low of September 18 and resistance at 1.6146, Thursday's high.
Market sentiment weakened as U.S. Republicans and Democrats were forced to quickly decide on how to continue funding the government and whether to increase the government's borrowing authority by raising the debt ceiling.
If President Barack Obama's administration and Republicans do not come to an agreement to raise the nation's borrowing cap before October, the U.S. Treasury may be able to avoid exceeding the USD16.7 trillion debt limit, which could send the country into default.
Separately, the greenback found some support after St. Louis Fed President James Bullard said on Friday that the U.S. central bank could taper its stimulus program during its October meeting.
The comments came after the Fed on Wednesday held back from reducing the USD85 billion pace of its monthly asset purchases.
Fed Chairman Ben Bernanke refused to commit to reducing bond purchases this year, saying the stimulus program was "not on a preset course."
Earlier Friday, official data showed that U.K. public sector net borrowing rose less-than-expected in August, rising by GBP11.5 billion after a downwardly revised 1.1% decline the previous month. Analysts had expected public sector net borrowing to rise by GBP12 billion last month.
Sterling was steady against the euro with EUR/GBP inching 0.07% higher, to hit 0.8446.
In the euro zone, investors were eyeing the outcome of Germany's general election on Sunday., with Chancellor Angela Merkel looking to secure a third term.
Trading volumes were expected to remain light on Friday, as no U.S. economic data was to be released throughout the session.