Forex - GBP/USD hits 13-month high, downside risks remain
Investing.com
Published Mar 01, 2011 03:34AM ET
GBP/USD hit 1.6326 during early European trade, the pair’s highest since January 2, 2010; the pair subsequently consolidated at 1.6314, gaining 0.36%.
Cable was likely to find support at 1.6255, the days low and resistance at 1.6456, the high of January 19, 2010.
The pound can be sensitive to month-end portfolio rebalancing due to the large number of portfolios that are run from London.
The currency has found support this year from expectations that the Bank of England will raise its benchmark interest rate in the coming months, but the central bank's decision will be dependent on evidence of a strengthening economic recovery.
Data on Friday showed the contraction in gross domestic product in the fourth quarter was worse than initially believed. The economy contracted by 0.6% in the fourth quarter, more than the 0.5% provisional estimate.
The pound was also up against the euro, with EUR/GBP shedding 0.22% to hit 0.8472.
Later Tuesday, the Chairman of the Federal Reserve, Ben Bernanke, was to testify on the semi-annual monetary policy report before the Senate Banking Committee in Washington, while the U.S. Institute for Supply Management was to publish a report on manufacturing activity.
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Written By: Investing.com
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