Forex - GBP/USD ticks higher as risk appetite improves

Published 01/19/2012, 04:03 AM
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Investing.com - The pound ticked higher against the U.S. dollar on Thursday, amid hopes that Greece will make headway in talks aimed at averting a default and the International Monetary Fund will enlarge its lending resources to contain the effects of Europe’s debt crisis.

GBP/USD hit 1.5454 during European morning trade, the session high; the pair subsequently consolidated at 1.5442, inching up 0.02%.

Cable was likely to find support at 1.5326, Wednesday’s low and resistance at 1.5500, the high of January 10.

Talks between Greek Prime Minister Lucas Papademos and the country’s creditors resumed on Wednesday, after breaking down last week amid disagreements over how much money investors will lose by swapping their bonds.

Greece needs to secure an agreement on restructuring its debt in order to access new bailout funds and avert a default when an EUR14.4 billion bond redemption comes due on March 20.

Market sentiment was also supported by reports that the IMF is looking at ways to raise as much as USD500 billion in new lending capacity, to help countries deal with the effects of the debt crisis in the euro zone.

Later in the day, France was to hold its first sale of medium and long-term debt after Standard & Poor’s downgraded its triple-A rating last week, while Spain was set to offer as much as EUR4.5 billion of bonds.

Sterling was lower against the euro, with EUR/GBP easing up 0.09% to hit 0.8339.

Also Thursday, the U.S. was to publish official data on building reports and housing starts as well as a report on consumer price inflation. The country was also to release government data on unemployment claims and a separate report on manufacturing activity in the Philadelphia area.


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