Investing.com - The pound rose against the dollar on Monday in a session void of major U.S. and U.K. economic indicators, which gave investors room to sell the greenback for profits ahead of Tuesday's U.S. gross domestic product report.
The dollar rose last week after China cut interest rates and after European Central Bank President Mario Draghi reiterated that monetary authorities will do what it takes to prop up the economy.
In U.S. trading on Monday, GBP/USD was up 0.33% at 1.5710, up from a session low of 1.5629 and off a high of 1.5714.
Cable was likely to find support at 1.5625, Friday's low, and resistance at 1.5737, Thursday's high.
The dollar rose on safe-haven demand last Friday when ECB President Mario Draghi reiterated that the central bank is prepared to act rapidly if low inflation persists, comments that sparked expectations for fresh stimulus measures.
Draghi also expressed concerns over the euro zone's weak growth, pointing out he saw no improvements in the coming months.
The ECB's current stimulus program includes purchases of asset-backed securities and covered bonds, though markets are keeping a close eye out for plans to announce purchases of government debt, a stimulus tool known as quantitative easing.
Also supporting the dollar last week was news that China cut its benchmark one-year deposit rate by 25 basis points to 2.75% and trimmed its one-year lending rate by 40 basis points to 5.6%.
By Monday, profit taking sent the dollar dipping against the pound, as investors flocked to the sidelines to await the release of revised data on U.S. third-quarter gross domestic product and a report on consumer confidence.
Upbeat data in Europe boosted the single currency, which added to Monday's dollar profit taking.
A widely-watched German business sentiment barometer improved this month after six successive months of declines, indicating that the downturn the euro area’s largest economy may be ending.
Germany’s Ifo business climate index rose to 104.7 from 103.2 in October, confounding forecasts for a decline to 103.0.
The current conditions index rose to 110.0 from 108.4 last month and the expectations index improved to 99.7 from 98.3, both figures topping market forecasts.
Elsewhere, sterling was down against the euro, with EUR/GBP up 0.03% at 0.7917, and up against the yen, with GBP/JPY up 0.79% at 185.90.