Investing.com – The pound extended gains against the U.S. dollar on Monday, rising to a three-day high as market sentiment was boosted by speculation that the European Central Bank may ease monetary policy to help the euro zone economy.
GBP/USD hit 1.5532 during European afternoon trade, the pair’s highest since September 21; the pair subsequently consolidated at 1.5528, gaining 0.52%.
Cable was likely to find support at 1.5330, Friday’s low and a one-year low and short-term resistance at 1.5746, the high of September 21.
Risk appetite was boosted by speculation that the ECB may cut interest rates to support the fragile euro zone economy, after ECB governing council member Ewald Nowotny said that the possibility of interest rate cuts should not be ruled out.
“The ECB never pre-commits, and rate cuts cannot be excluded. It all depends on the developments ahead," he said.
The pound briefly dipped earlier after Bank of England policymaker Ben Broadbent said the pound was likely to remain weak for some time and that the slowdown in global growth would weigh on inflation.
The remarks came after last week’s minutes of the central bank’s September meeting indicated that policymakers are leaning towards implementing more monetary easing to boost the U.K. economy, possibly as early as next month.
The pound was also higher against the euro, with EUR/GBP shedding 0.36% to hit 0.8705.
Later in the day, the U.S. was to produce government data on new home sales.
GBP/USD hit 1.5532 during European afternoon trade, the pair’s highest since September 21; the pair subsequently consolidated at 1.5528, gaining 0.52%.
Cable was likely to find support at 1.5330, Friday’s low and a one-year low and short-term resistance at 1.5746, the high of September 21.
Risk appetite was boosted by speculation that the ECB may cut interest rates to support the fragile euro zone economy, after ECB governing council member Ewald Nowotny said that the possibility of interest rate cuts should not be ruled out.
“The ECB never pre-commits, and rate cuts cannot be excluded. It all depends on the developments ahead," he said.
The pound briefly dipped earlier after Bank of England policymaker Ben Broadbent said the pound was likely to remain weak for some time and that the slowdown in global growth would weigh on inflation.
The remarks came after last week’s minutes of the central bank’s September meeting indicated that policymakers are leaning towards implementing more monetary easing to boost the U.K. economy, possibly as early as next month.
The pound was also higher against the euro, with EUR/GBP shedding 0.36% to hit 0.8705.
Later in the day, the U.S. was to produce government data on new home sales.