Forex - GBP/USD holds gains, Greek austerity plan in focus

Published 02/13/2012, 06:55 AM
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Investing.com - The pound remained higher against the U.S. dollar on Monday, as hopes that Greece will obtain its second bailout package were boosted after the country’s parliament voted a series of new austerity measures.

GBP/USD hit 1.5828 during European afternoon trade, the daily high; the pair subsequently consolidated at 1.5807, advancing 0.32%.

Cable was likely to find support at 1.5749, the low of February 3 and resistance at 1.5858, the high of February 2.

The pound tracked the euro higher after Greece’s parliament approved on Sunday a set of austerity measures, including cuts in private-sector wages, 15,000 public-sector job cuts and EUR3 billion in government-spending cuts this year alone.

Sterling’s gains were limited, however, as Greece must still find a further EUR325 million of spending cuts and give binding assurances the plan will be implemented before Wednesday when euro zone finance ministers meet to decide on a new EUR130 billion bailout.

Earlier Monday, Germany Finance Minister Wolfgang Schaeuble said in an interview with a German newspaper that Greek promises on austerity measures are no longer good enough because so many vows have been broken.

The pound was lower against the euro with EUR/GBP adding 0.14%, to hit 0.8388.

Also Monday, Germany sold EUR3 billion of six-month bills at an average yield of 0.0761%, while Italy sold EUR8.5 billion of one-year bills at yields of 2.23%, down from 2.735% at a similar auction last month, plus another EUR3.5 billion of 127-day bills at just 1.5%, down from 1.64%.


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