Forexpros – The pound inched higher against the U.S. dollar on Tuesday, buoyed by hopes that the European Central Bank will soon act to ease the debt crisis in the euro zone, but investors remained cautious ahead of U.K. manufacturing later in the session.
GBP/USD hit 1.5619 during early European trade, the session high; the pair subsequently consolidated at 1.5610, inching up 0.06%.
Cable was likely to find support at 1.5545, Monday’s low and resistance at 1.5664, Monday’s high.
Expectations that the ECB will soon take steps to help lower Spanish and Italian borrowing costs have been building since ECB head Mario Draghi indicated last week that the bank may restart its bond buying program.
Investors were waiting to see if Spain or Italy request assistance from the bloc’s bailout funds, after Spanish Prime Minister Mariano Rajoy indicated last week that Madrid may ask for European Financial Stability Facility aid.
Sentiment on sterling remained fragile, after a recent string of weak economic data underlined concerns over the outlook for the recession hit economy and kept alive expectations for more quantitative easing by the Bank of England.
The pound was fractionally lower against the euro, with EUR/GBP inching up 0.07% to 0.7953.
Later Tuesday, the U.K. was to publish official data on manufacturing and industrial production.
In the U.S., Federal Reserve Chairman Ben Bernanke was to speak at an event in Washington DC.
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