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Forex - GBP/USD rises off multi-month lows in quiet trade

Published 01/20/2015, 04:41 AM
Pound edges mildly higher vs. dollar, gains seen limited
GBP/USD
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EUR/GBP
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Investing.com - The pound edged up against the U.S. dollar in quiet trade on Tuesday, pulling away from nearly 18-month lows hit earlier in the session, although gains were expected to remain limited by ongoing support for the safe-haven greenback.

GBP/USD hit 1.5144 during European morning trade, the pair's lowest since January 8; the pair subsequently consolidated at 0.7656, rising 0.28%.

Cable was likely to find support at 1.5032, the low of January 8 and an 18-month low and resistance at 1.5236, the high of January 16.

The dollar remained broadly supported after the Swiss National Bank shocked markets last Thursday by abandoning its three-year old 1.20 per euro exchange rate cap.

Meanwhile, sentiment on the pound remained vulnerable after data last week showed that the annual rate of consumer inflation in the U.K. slowed to 0.5% last month from 1.0% in November.

The slowdown in inflation underlined expectations that the Bank of England will keep interest rates on hold at record lows for most of this year.

Sterling was also higher against the euro, with EUR/GBP shedding 0.29% to 0.7657.

The euro remained under pressure amid mounting expectations that the ECB will launch a government bond-buying program at its meeting on Thursday, in a bid to stave off the threat of deflation in the euro area.

Uncertainty over the outcome of next Sunday's Greek elections, with anti-bailout party Syriza leading in the polls, also weighed on the single currency.

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