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Forex - Pound edges up to more than 1-month highs vs. weaker dollar

Published 02/16/2015, 04:30 AM
Pound rises against greenback, U.S. data still weighs
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Investing.com - The pound edged up to more than one-month highs against the U.S. dollar in quiet trade on Monday, as sentiment on the greenback remained vulnerable after a recent string of downbeat U.S. data.

Trading volumes were expected to remain light on Monday with U.S. markets closed for the Presidents' Day Holiday.

GBP/USD hit 1.5440 during European morning trade, the pair's highest since January 2; the pair subsequently consolidated at 1.5413, adding 0.12%.

Cable was likely to find support at 1.5206, the low of February 12 and resistance at 1.5586, the high of January 2.

The dollar remained under pressure after data on Friday showed that the preliminary reading of the University of Michigan’s consumer sentiment index fell to 93.6, down from January’s final reading of 98.1. Economists had forecast an unchanged figure.

The report came a day after data showing that U.S. retail sales unexpectedly fell 0.8% last month after dropping 0.9% in December, indicating that consumer spending remained sluggish at the start of the year.

The pound had strengthened last week after the Bank of England said inflation is likely to fall to zero in the first half of this year, but added that there was no threat of deflation taking hold in the U.K.

The BoE also raised its growth forecast for this year to 2.9% from 2.6% previously and said it also expects growth of 2.9% in 2016.

Sterling was lower against the euro, with EUR/GBP edging up 0.16% to 0.7409.

Sentiment on the euro remained fragile as officials from Greece and the European Union were due to hold fresh talks on Monday after a meeting on a new debt deal last week ended without an agreement.

Greece’s current €240 billion bailout is due to expire on February 28 and the new Greek government does not want it extended, fuelling fears over a conflict with its creditors which could trigger the country’s exit from the euro zone.

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