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Pound Hits 13-month High Against Broadly Weaker Dollar
Written by article default Wednesday, 02 March 2011 17:59
The pound rose to a 13-month high against the broadly weaker U.S. dollar on Wednesday, as oil prices surged above USD100 a barrel, sparking concerns over the impact on the U.S. economic recovery.GBP/USD hit 1.6344 during European late afternoon trade; the pair’s highest since January 20, 2010; the pair subsequently consolidated at 1.6339, gaining 0.44%.
Cable was likely to find support at 1.6070, Tuesday’s low and resistance at 1.6456, the high of January 19, 2010.
In testimony before the Senate Banking Committee on Tuesday, U.S. Federal Reserve Chairman Ben Bernanke warned that a sustained rise in oil prices could spark a broader rise in inflation.
”Sustained rises in the prices of oil and other commodities would represent a threat both to economic growth and to overall price stability,” he said.
Earlier Wednesday, a report by payroll processing firm ADP said U.S. private sector employment rose by 217,000 in February, better than the expected 170,000.
Also Wednesday, data showed that the U.K.’s February construction PMI posted a better-than-expected reading, boosted by a significant rise in new business and a reduced number of job losses.
Meanwhile, the pound was down against the euro, with EUR/GBP rising 0.29% to hit 0.8494.
Later in the day, Ben Bernanke was to testify for a second day before the Senate Banking Committee in Washington, while the Fed was to publish its Beige Book.