Investing.com - The pound remained close to a two-and-a-half month high against the U.S. dollar on Monday, after the release of downbeat U.S. manufacturing data, while investors remained cautious amid U.S. budget talks.
GBP/USD hit 1.6216 during European afternoon trade, the pair's highest since October 5; the pair subsequently consolidated at 1.6206, rising 0.22%.
Cable was likely to find support at 1.6158, the session low and resistance at 1.6272, the high of September 28.
The Federal Reserve of New York said that its index of manufacturing activity deteriorated to minus 8.1 in December from a reading of minus 5.2 the previous month.
Analysts had expected the index to improve to minus 1.
Separately, the dollar remained under pressure after the Federal Reserve announced new easing measures last week and said interest rates would remain close to zero as long as inflation forecasts remain near the bank’s 2% target and until the U.S. unemployment rate declines to 6.5% or less.
This was offset by ongoing concerns over the U.S. fiscal cliff, approximately USD600 billion of automatic tax hikes and spending cuts due to take effect on January 1 which investors’ fears could derail the U.S. recovery, if lawmakers cannot reach an agreement.
Elsewhere, sterling was higher against the euro with EUR/GBP falling 0.18%, to hit 0.8123.
Later in the day, European Central Bank President Mario Draghi was to appear before the European Parliament’s Committee on Economic and Monetary Affairs to discuss the economy.
GBP/USD hit 1.6216 during European afternoon trade, the pair's highest since October 5; the pair subsequently consolidated at 1.6206, rising 0.22%.
Cable was likely to find support at 1.6158, the session low and resistance at 1.6272, the high of September 28.
The Federal Reserve of New York said that its index of manufacturing activity deteriorated to minus 8.1 in December from a reading of minus 5.2 the previous month.
Analysts had expected the index to improve to minus 1.
Separately, the dollar remained under pressure after the Federal Reserve announced new easing measures last week and said interest rates would remain close to zero as long as inflation forecasts remain near the bank’s 2% target and until the U.S. unemployment rate declines to 6.5% or less.
This was offset by ongoing concerns over the U.S. fiscal cliff, approximately USD600 billion of automatic tax hikes and spending cuts due to take effect on January 1 which investors’ fears could derail the U.S. recovery, if lawmakers cannot reach an agreement.
Elsewhere, sterling was higher against the euro with EUR/GBP falling 0.18%, to hit 0.8123.
Later in the day, European Central Bank President Mario Draghi was to appear before the European Parliament’s Committee on Economic and Monetary Affairs to discuss the economy.