Investing.com - The pound was steady close to eight-month highs
against the dollar on Monday as the prospect of the U.S. government
shutting down weighed on dollar demand.
GBP/USD hit 1.6182 during European morning trade, the highest since
early January; the pair subsequently consolidated at 1.6156, easing
Cable was likely to find support at 1.6100 and resistance at
Political wrangling in Washington over funding for President Barack
Obama's healthcare law continued over the weekend, fuelling fears
over a possible government shutdown.
Congress must pass a short-term budget by midnight on Monday in
order to keep the government open.
Republican opposition to the funding of the Affordable Care Act has
created a standoff with the White House and the
Democratic-controlled Senate, which have both said they will not
support any budget bill that defunds or amends Obamacare.
Market sentiment was also hit after data on Monday showed that
China's HSBC manufacturing index was revised down to 50.2 from an
initial reading of 51.2 this month, indicating that the recovery in
the world's second largest economy remains fragile.
Economists had expected an unchanged reading.
Demand for sterling continued to be underpinned after Bank of
England Governor Mark Carney said last week that he did not see a
case for further quantitative easing.
The pound showed little reaction after data released on Monday
showed that U.K. net lending rose in line with expectations in
August, while mortgage approvals rose more than expected.
Elsewhere, the euro was trading close to eight-month lows against
the pound, with EUR/GBP down 0.20% to 0.8362 as concerns over
political instability in Italy weighed.
Silvio Berlusconi announced Saturday that he was pulling his
ministers out of Prime Minister Enrico Letta's coalition government
and called for fresh elections to be held.
offers an extensive set of professional tools for the financial
Read more News on Investing.com or Download the new Investing.com
App for Android