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Forex - GBP/USD hits 2-1/2 month high in quiet trade

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Investing.com - The pound hit a two-and-a-half month high against the U.S. dollar in quiet trade on Monday, as investors remained focused on the outcome of U.S. fiscal cliff negotiations.

GBP/USD hit 1.6199 during European morning trade, the pair's highest since October 5; the pair subsequently consolidated at 1.6183, gaining 0.10%.

Cable was likely to find support at 1.6102, Friday's low and resistance at 1.6271, the high of September 28.

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.

But investors remained cautious amid 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.

Sterling was higher against the euro, with EUR/GBP slipping 0.14% to 0.8126.

Later Monday, European Central Bank President Mario Draghi was to appear before the European Parliament's Committee on Economic and Monetary Affairs to discuss the economy.

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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.


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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