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Forex - GBP/USD extends gains to 3-day high on Miles comments

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Forexpros - The pound extended gains against the U.S. dollar on Monday, climbing to a three-day high after Bank of England policy maker David Miles said further quantitative easing was not currently necessary.

GBP/USD hit 1.6327 during European afternoon trade, the highest since August 10; the pair subsequently consolidated at 1.6312, edging 0.18% higher.

Cable was likely to find support at 1.6165, last Friday's low and resistance at 1.6409, the high of August 9.

David Miles, one of four external members of the BOE's Monetary Policy Committee said in an interview published Monday that the U.K. economy is on a fragile recovery path, but added that further quantitative easing was not necessary.

"There could be circumstances under which I would judge the right policy would be to embark on further asset purchases but that's not how I've seen things thus far," Miles said.

According to Miles, increased business investment and a recovery in consumer spending will spur economic growth in the U.K. over the coming year.

Sterling was boosted earlier after better-than-expected Japanese economic data helped ease fears over the global economic outlook.

Preliminary data released earlier in the day showed that Japan's economy contracted less-than-expected in the second quarter, signaling the country is rebounding from March's earthquake disaster at a faster rate than expected.

Japan's gross domestic shrank by 0.3% in the second quarter, or 1.3% on an annualized basis. Analysts had expected Japan's economy to contract by 0.9% in the quarter, or 2.5% on an annualized basis.

Elsewhere, the pound was down against the euro, with EUR/GBP gaining 0.17% to hit 0.8769.

Germany's government spokesman Steffen Seibert said earlier that the introduction of euro bonds will not be on the agenda when German Chancellor Angela Merkel and French President Nicolas Sarkozy meet on Tuesday.

Later in the day, the U.S. was to produce official data on manufacturing activity in New York State and a report on the balance of domestic and foreign investment in the U.S.

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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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