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Forex - GBP/USD rises ahead of BoE rate statement

Published 07/09/2015, 04:25 AM
© Reuters.  Pound gains ground vs. dollar as sentiment improves, BoE statement on tap
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Investing.com - The pound rose against the U.S. dollar on Thursday, pulling away from a one-month low amid fresh hopes for Greece after the country requested a new three-year bailout and as markets eyed the Bank of England's monthly rate statement later in the day.

GBP/USD hit 1.5421 during European morning trade, the session high; the pair subsequently consolidated at 1.5397, rising 0.24%.

Cable was likely to find support at 1.5327, Tuesday's low and resistance at 1.5468, Tuesday's high.

Sentiment mildly improved after Greece requested a new three-year bailout from its euro zone creditors and pledged some economic overhauls on Wednesday.

Whether European leaders accept Greece's request for more emergency loans at a crisis summit on Sunday will depend on whether Prime Minister Alexis Tsipras makes a drastic turnaround on pension cuts, tax increases and other austerity measures after five months of negotiations.

German Finance Minister Wolfgang Schäuble said that "the actual examination can only begin once the full package has been put on the table."

Meanwhile, the minutes of the Fed's June policy meeting showed that policy makers need to see more signs of a strengthening U.S. economy before raising interest rates.

In its June policy statement, the central bank had indicated that it was on track for at least one and perhaps a second rate increase later this year.

The minutes also pointed to concerns over Greece's financial problems, signaling that global market turmoil could derail the Fed's rate hike plans if contagion spreads.

Later Thursday, the BoE was expected leave its monetary policy unchanged, with the benchmark interest rate at 0.50% and the asset purchase facility at £375 billion.

Sterling was higher against the euro, with EUR/GBP declining 0.60% to 0.7170.

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