Investing.com - The pound rebounded against the dollar on Monday, snapping three days of losses, as investors awaited the outcome of this week’s Federal Reserve policy meeting.
GBP/USD hit session highs of 1.6347 and was last up 0.24% to 1.6333, recovering from almost three week lows of 1.6261 on Friday.
Cable was likely to find support at 1.6261 and resistance at 1.6417, last Thursday’s high.
Investors remained cautious ahead of the outcome of the Fed’s upcoming policy meeting on Wednesday, with some expecting the bank to announce a small reduction in the pace of its USD85 billion-a-month asset purchase program.
Markets were turning their attention to U.S. inflation data due out on Tuesday amid concerns that the subdued inflation outlook could prompt the Fed to keep its stimulus program in place for longer.
Demand for the pound continued to be underpinned after a recent series of robust U.K. economic data cemented the view that the recovery is deepening, fuelling expectations that the Bank of England may raise interest rates before other central banks.
Elsewhere, sterling touched one month lows against the euro after data on Monday showed that private sector activity in the euro zone rose in December.
EUR/GBP hit session highs of 0.8455, the strongest level since November 13 and was last up 0.09% to 0.8440.
The euro zone’s composite output index rose to a three month high of 52.1 in December, from 51.7 in November, indicating that European Central Bank policymakers will not need to step up stimulus measures. It was the fastest increase since April 2011.
Private sector output in the euro zone’s largest economy continued to expand steadily in December, with Germany’s manufacturing index rising to a 30-month high, but the rate of decline in France accelerated, raising concerns that the country could fall back into a recession.
GBP/USD hit session highs of 1.6347 and was last up 0.24% to 1.6333, recovering from almost three week lows of 1.6261 on Friday.
Cable was likely to find support at 1.6261 and resistance at 1.6417, last Thursday’s high.
Investors remained cautious ahead of the outcome of the Fed’s upcoming policy meeting on Wednesday, with some expecting the bank to announce a small reduction in the pace of its USD85 billion-a-month asset purchase program.
Markets were turning their attention to U.S. inflation data due out on Tuesday amid concerns that the subdued inflation outlook could prompt the Fed to keep its stimulus program in place for longer.
Demand for the pound continued to be underpinned after a recent series of robust U.K. economic data cemented the view that the recovery is deepening, fuelling expectations that the Bank of England may raise interest rates before other central banks.
Elsewhere, sterling touched one month lows against the euro after data on Monday showed that private sector activity in the euro zone rose in December.
EUR/GBP hit session highs of 0.8455, the strongest level since November 13 and was last up 0.09% to 0.8440.
The euro zone’s composite output index rose to a three month high of 52.1 in December, from 51.7 in November, indicating that European Central Bank policymakers will not need to step up stimulus measures. It was the fastest increase since April 2011.
Private sector output in the euro zone’s largest economy continued to expand steadily in December, with Germany’s manufacturing index rising to a 30-month high, but the rate of decline in France accelerated, raising concerns that the country could fall back into a recession.