Investing.com - The pound rose against the dollar on Monday as
investors crept out of the safety of the greenback on hopes
Congress will strike a deal to avoid the fiscal cliff, a
combination of sweeping tax hikes and automatic spending cuts due
to take effect at the end of 2012.
Failure to reach a deal could contract the economy by 0.5% next
year, according to Congressional Budget Office estimates, which
would constitute a recession.
In U.S. trading on Monday, GBP/USD was trading at 1.6246, up 0.52%,
up from a session low of 1.6134 and off from a high of 1.6274.
The pair was likely to find support at 1.6079, Friday's low, and
resistance at 1.6306, the high from Dec. 19.
President Barack Obama on Monday said an agreement was in sight
though stressed nothing had been finalized yet, which kept
investors parked in the safe-haven dollar earlier, though
sentiments began to quickly rebuild that some sort of a deal may be
struck by the end of the day, which enticed a few investors out of
the safety of the greenback.
Meanwhile in the U.K., the Bank of England reported earlier that
U.K. Housing Equity Withdrawal fell to a seasonally adjusted GBP8.0
billion compared to GBP9.4 billion in the preceding quarter.
Analysts had expected U.K. Housing Equity Withdrawal to fall GPB9.1
billion last month.
Still, U.S. fiscal uncertainty served as Cable's chief weather vane
The pound, meanwhile, was up against the euro and up against the
yen, with EUR/GBP trading down 0.71% at 0.8121 and GBP/JPY up 1.27%
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