Investing.com - The pound remained higher against the U.S. dollar on Monday, hovering close to a two-and-a-half month high despite downbeat comments by European Central Bank President Mario Draghi, as investors hoped for progress in U.S. budget talks.
GBP/USD hit 1.6216 during U.S. morning trade, the pair's highest since October 5; the pair subsequently consolidated at 1.6206, rising 0.22%.
Cable was likely to find support at 1.6158, the session low and resistance at 1.6272, the high of September 28.
In testimony to the European Parliament’s Committee on Economic and Monetary Affairs Draghi said that the economic environment in the euro zone was challenging and was likely to remain so for some time to come.
Meanwhile, the dollar remained under pressure after the Federal Reserve announced new easing measures last week and said interest rates would remain close to zero as long as inflation forecasts remain near the bank’s 2% target and until the U.S. unemployment rate declines to 6.5% or less.
But this was offset by ongoing concerns over the U.S. fiscal cliff, approximately USD600 billion of automatic tax hikes and spending cuts due to take effect on January 1 which investors’ fears could derail the U.S. recovery, if lawmakers cannot reach an agreement.
Sterling was higher against the euro with EUR/GBP falling 0.12%, to hit 0.8129.
Also Monday, the Federal Reserve Bank of New York said that its general business conditions index declined to minus 8.1 in December from a reading of minus 5.2 in November.
Analysts had expected the index to improve to minus 1.0 in December.
GBP/USD hit 1.6216 during U.S. morning trade, the pair's highest since October 5; the pair subsequently consolidated at 1.6206, rising 0.22%.
Cable was likely to find support at 1.6158, the session low and resistance at 1.6272, the high of September 28.
In testimony to the European Parliament’s Committee on Economic and Monetary Affairs Draghi said that the economic environment in the euro zone was challenging and was likely to remain so for some time to come.
Meanwhile, the dollar remained under pressure after the Federal Reserve announced new easing measures last week and said interest rates would remain close to zero as long as inflation forecasts remain near the bank’s 2% target and until the U.S. unemployment rate declines to 6.5% or less.
But this was offset by ongoing concerns over the U.S. fiscal cliff, approximately USD600 billion of automatic tax hikes and spending cuts due to take effect on January 1 which investors’ fears could derail the U.S. recovery, if lawmakers cannot reach an agreement.
Sterling was higher against the euro with EUR/GBP falling 0.12%, to hit 0.8129.
Also Monday, the Federal Reserve Bank of New York said that its general business conditions index declined to minus 8.1 in December from a reading of minus 5.2 in November.
Analysts had expected the index to improve to minus 1.0 in December.