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GBP/USD Trims Gains, Tracking Euro Lower
Written by article default Monday, 07 February 2011 15:49
The pound trimmed gains against the U.S. dollar on Monday, tracking the euro lower after data showed that German factory orders fell significantly more-than-expected in December.GBP/USD retreated from 1.6184, the pair’s highest since Thursday, to hit 1.6112 during European afternoon trade, gaining 0.02%.
Cable was likely to find support at 1.6036, Friday’s low and resistance at 1.6277, last Thursday’s high and a 12-week high.
The pound remained supported on the view that that the Bank of England will raise interest rates by the middle of the year.
The BoE’s monetary policy committee is to meet later this week and while it is widely expected to keep the bank rate unchanged at 0.5% and maintain its asset buying program, markets have priced in a rate hike by May.
Last month BoE policymaker Martin Weale became the second committee member to join Andrew Sentance in voting to increase rates.
The pound was also higher against the euro with EUR/GBP shedding 0.26% to hit 0.8409.
Later in the day, the U.S. was to release a government report on consumer credit.