Investing.com - The pound remained higher against the U.S. dollar on Wednesday, as investors turned to the minutes of the Federal Reserve’s latest policy-setting meeting to be released later in the day, while concerns over the euro zone’s financial woes continued to weigh.
GBP/USD hit 1.5578 during European afternoon trade, the pair’s highest since July 5; the pair subsequently consolidated at 1.5572, rising 0.34%.
Cable was likely to find support at 1.5477, Tuesday’s low and resistance at 1.5621, the high of July 6.
Market sentiment remained under pressure after Germany’s Constitutional Court delayed on Tuesday its decision on whether the euro zone's bailout fund, the European Stability Mechanism, is compatible with German law.
The court said a decision could take months rather than weeks due to the complexity of the ruling. Without German backing, the ESM, which was originally meant to start on July 1, then delayed to July 9, cannot come into effect.
Meanwhile, Spanish Prime Minister Mariano Rajoy announced EUR65 billion of new austerity measures earlier in the day, in an effort to meet new budget-deficit targets agreed with euro zone partners.
However, market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
The fresh budget cuts come a day after the conclusion of the latest meeting of euro zone finance ministers.
While the ministers agreed to grant Spain an extra year through 2014 to reach its deficit reduction targets, they did not come up with a final figure for aid for the country's ailing banks but said some EUR30 billion would be available by the end of this month.
Meanwhile, sterling remained supported after data on Tuesday showed that U.K. manufacturing production rose by 1.2% in May, blowing past expectations for a more modest 0.1% gain, after falling by 0.8% in April.
A separate report showed that the U.K.’s goods trade deficit narrowed more-than-expected in May, as exports picked up from the previous month.
Elsewhere, the pound was trading close to a fresh three-and-a-half year high against the euro with EUR/GBP falling 0.11%, to hit 0.7885.
Later in the day, the U.S. was to release official data on trade balance and crude oil stockpiles, followed by the minutes of the Federal Reserve’s June policy-setting meeting.
GBP/USD hit 1.5578 during European afternoon trade, the pair’s highest since July 5; the pair subsequently consolidated at 1.5572, rising 0.34%.
Cable was likely to find support at 1.5477, Tuesday’s low and resistance at 1.5621, the high of July 6.
Market sentiment remained under pressure after Germany’s Constitutional Court delayed on Tuesday its decision on whether the euro zone's bailout fund, the European Stability Mechanism, is compatible with German law.
The court said a decision could take months rather than weeks due to the complexity of the ruling. Without German backing, the ESM, which was originally meant to start on July 1, then delayed to July 9, cannot come into effect.
Meanwhile, Spanish Prime Minister Mariano Rajoy announced EUR65 billion of new austerity measures earlier in the day, in an effort to meet new budget-deficit targets agreed with euro zone partners.
However, market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
The fresh budget cuts come a day after the conclusion of the latest meeting of euro zone finance ministers.
While the ministers agreed to grant Spain an extra year through 2014 to reach its deficit reduction targets, they did not come up with a final figure for aid for the country's ailing banks but said some EUR30 billion would be available by the end of this month.
Meanwhile, sterling remained supported after data on Tuesday showed that U.K. manufacturing production rose by 1.2% in May, blowing past expectations for a more modest 0.1% gain, after falling by 0.8% in April.
A separate report showed that the U.K.’s goods trade deficit narrowed more-than-expected in May, as exports picked up from the previous month.
Elsewhere, the pound was trading close to a fresh three-and-a-half year high against the euro with EUR/GBP falling 0.11%, to hit 0.7885.
Later in the day, the U.S. was to release official data on trade balance and crude oil stockpiles, followed by the minutes of the Federal Reserve’s June policy-setting meeting.