Forexpros – The pound rose to a three-week high against the U.S. dollar in thin trade on Tuesday, tracking gains in the euro, following reports that Germany will back the European Central Bank’s bond buying program.
GBP/USD hit 1.5761 during European morning trade, the pair’s highest since July 27; the pair subsequently consolidated at 1.5748, gaining 0.25%.
Cable is likely to find support at 1.5701, the session low and resistance at 1.5847, the high of May 22.
In an interview with The Telegraph newspaper on Tuesday, the German member of the ECB’s Executive Board, J?rg Asmussen, indicated that he would support the bond purchasing program proposed by ECB head Mario Draghi, in spite of warnings from Germany’s central bank.
In its monthly report on Monday, Germany’s Bundesbank reiterated its opposition to the ECB’s plan to embark on “unlimited” government bond purchases.
The ECB dismissed reports Monday that it may set a cap on peripheral euro zone bond yields, saying it was “absolutely misleading” to report on decisions that have not yet been taken.
The pound was lower against the euro, with EUR/GBP up 0.27% to 0.7877.
Later in the day, the U.K. was to release official data on public sector borrowing. Trade looked likely to remain subdued on Tuesday, as volumes were thin with many market participants on summer holidays.
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