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Forex - GBP/USD holds steady in cautious trade

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Investing.com - The pound held steady against the U.S. dollar on Tuesday, as markets were jittery ahead of the Federal Reserve's two day policy meeting, due to begin later in the day.

GBP/USD hit 1.5936 during U.S. morning trade, the session high; the pair subsequently consolidated at 1.5906, inching up 0.05%.

Cable was likely to find support at 1.5850 and resistance at 1.5962, Monday's high and the highest since January.

Investors remained cautious ahead of the outcome of the Fed's two-day policy meeting on Wednesday, amid expectations for a small reduction to the bank's USD85 billion-a-month stimulus program.

The dollar showed little reaction after data release on Tuesday showed that U.S. consumer prices rose 0.1% in August, below forecasts for a 0.2% increase.

Consumer inflation rose by 1.5% on a year-over-year basis, undershooting expectations for a 1.6% gain.

Core inflation edged up 0.1% in August, bringing the annual rate of core inflation to 1.8%, in line with forecasts.

Earlier in the day, the Office for National Statistics said U.K. consumer price inflation ticked down to 2.7% on a year-over-year basis in August from 2.8% in July, in line with economists' forecasts.

Core CPI remained unchanged at 2% last month, compared to expectations for an uptick to 2.1%.

Consumer prices rose by 0.4% on the month in August, compared to expectations for a 0.5% increase.

Sterling was also steady against the euro with EUR/GBP easing up 0.02%, to hit 0.8388.

Also Tuesday, a report showed that the closely watched ZEW index of German economic sentiment rose to the highest level since April 2010 in September.

The ZEW index of German economic sentiment rose to 49.6 in September from 42.0 last month, on the back of the improved economic outlook for the euro zone. Analysts had forecast a reading of 46.0.

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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.


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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