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Forex - GBP/USD holds gains, BoE comments still support

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Investing.com -

Investing.com - The pound held gains against the U.S. dollar in subdued trade on Monday, as comments by Bank of England Governor Mark Carney continued to support demand for sterling.

GBP/USD hit 1.6738 during U.S. morning trade, the pair's highest since August 13; the pair subsequently consolidated at 1.6714, adding 0.13%.

Cable was likely to find support at 1.6677, the low of August 15 and resistance at 1.6816, the high of August 12.

The pound strengthened broadly after BoE Governor Carney said over the weekend that interest rates could rise before wage growth picks up.

In a newspaper interview published on Sunday, Carney said that the bank did not have to wait for wage growth to recover before raising interest rates, shifting away from comments last week indicating the opposite.

Investors were looking ahead to Wednesday's minutes of the BoE's August policy meeting for signs that the bank is moving closer to hiking borrowing costs.

Elsewhere, concerns over the conflict between Russia and Ukraine escalated on Friday after Ukraine's military attacked and destroyed a number of armored vehicles that entered the country from Russia.

Market sentiment found some support however, amid hopes that a meeting due to take place between Russian and Ukraine's foreign ministers later in the day would result in a breakthrough to ease geopolitical tensions in the region.

Sterling was higher against the euro, with EUR/GBP declining 0.44% to 0.7993.

In the U.S., data on Monday showed that the National Association of Home Builders/Wells Fargo rose to a seven-month high of 55.0 in August from 53.0 in July, beating estimates for a reading of 53.0.

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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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