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Forex - GBP/USD erases gains amid stimulus fears

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Forexpros - The pound erased gains against the U.S. dollar on Monday, pulling back from the daily high, amid expectations that the Federal Reserve may indicate that fresh monetary stimulus could be needed to support the U.S. economy.

GBP/USD pulled back from 1.6521, the daily high to hit 1.6465 during U.S. morning trade, unchanged over the day.

Cable was likely to find support at 1.6347, the low of August 17 and short-term resistance at 1.6564, last Thursday's high.

Risk appetite was dented by mounting speculation that Fed Chairman Ben Bernanke could indicate that further monetary stimulus may be necessary when he speaks at the central banks annual economic symposium in Jackson Hole, Wyoming, on Friday.

Meanwhile, the pound was fractionally higher against the euro, with EUR/GBP dipping 0.05% to hit 0.8737.

The single currency remained under pressure after German Chancellor Angela Merkel reiterated her opposition to calls for the euro zone to issue joint euro-denominated bonds, saying that such measures would do little to alleviate debt concerns.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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