Forex - GBP/USD rises on Greece bailout hopes

Published 02/20/2012, 04:46 AM
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Investing.com - The pound was higher against the U.S. dollar on Monday, as hopes that Greece is moving closer to securing a second bailout boosted demand for riskier assets while a decision by China to ease monetary policy also buoyed sentiment.

GBP/USD hit 1.5880 during European morning trade, the pair’s highest since February 9; the pair subsequently consolidated at 1.5859, gaining 0.20%.

Cable was likely to find support at 1.5826, the session low and resistance at 1.5904, the high of February 7.

Risk appetite was bolstered after the leaders of Germany, Italy and Greece expressed optimism that an agreement on a second bailout and debt restructuring deal for Greece would be reached at a meeting of euro zone finance ministers in Brussels later Monday.

Sentiment also found support after the People’s Bank of China announced Saturday a decision to cut the reserve requirement ratios of major commercial lenders in an attempt to boost liquidity and spur growth in the world’s second largest economy.

In the U.K., a report by property website Rightmove showed that average asking prices for houses jumped 4.1% in February, the highest monthly increase since April 2002, indicating increasing confidence in the housing market.

Elsewhere, the pound was lower against the euro, with EUR/GBP rising 0.37% to hit 0.8332.

Trade was expected to remain subdued on Monday, with markets in the U.S. remaining closed for the Presidents Day holiday.


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