Forex - GBP/USD rebounds off 1-month low as risk aversion eases

Published 11/24/2010, 03:18 AM
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Investing.com – The pound was up against the U.S. dollar on Wednesday, rebounding from a 1-month low as risk aversion sparked by a military skirmish on the Korean peninsula eased while concerns over euro zone sovereign debt contagion simmered.

GBP/USD hit 1.5838 during late Asian trade, the daily high; the pair subsequently consolidated at 1.5792, gaining 0.11%.

Cable was likely to find support at 1.5757, Tuesday’s low and a 1-month low and resistance at 1.5964, Tuesday’s high.

Seoul’s measured response in the wake of a North Korea artillery attack on a South Korean island close to a disputed sea border on Tuesday blunted the incidents impact on financial markets.

Meanwhile, officials from the European Union urged Ireland to adopt an austerity budget in time to access a rescue package from the EU and the International Monetary Fund as a deepening political crisis in the country threatened to derail the financial bailout.

Political turmoil in Ireland has stoked fears that the country’s debt crisis would spread to other vulnerable euro zone members such as Portugal or Spain.

Meanwhile, the pound was down against the euro, with EUR/GBP edging up 0.04% to hit 0.8477.

Later in the day, the U.S. was to release a slew of data ahead of the Thanksgiving holiday, with a weekly report on initial jobless claims as well as data on personal spending, durable goods orders and new home sales. The country was also to publish revised data on consumer sentiment and inflation expectations while the U.K. was to release revised third quarter GDP data.

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