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Forex - Pound hits 3-month highs against dollar

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Investing.com - The pound extended gains against the U.S. dollar on Wednesday, rising to three-month highs as investor sentiment strengthened amid growing optimism over a deal to avoid the U.S. fiscal cliff.

GBP/USD hit 1.6306 during European afternoon trade, the pair's highest since September 21; the pair subsequently consolidated at 1.6299, gaining 0.30%.

Cable was likely to find support at 1.6244, the session low and resistance at 1.6422, the high of August 30, 2011.

Risk appetite was boosted by signs of progress in negotiations aimed at avoiding the fiscal cliff, automatic tax hikes and spending cuts due to take effect on January 1, which investors fear could threaten U.S. and global growth.

In the euro zone, data showed that German business confidence continued to improve in December, in spite of the deteriorating outlook for the euro zone economy.

The pound found support after the minutes of the Bank of England's December meeting showed that the monetary policy committee was split eight-to-one, with just one member in favor of further easing , while the vote to leave interest rates unchanged at 0.5% was unanimous.

Sterling hit a two-month low against the stronger euro, with EUR/GBP up 0.21% to 0.8156.

Later Wednesday the U.S. was to publish government data on building permits, housing starts and crude oil stockpiles.

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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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