Forexpros – The pound rallied to a one-week high against the U.S. dollar on Tuesday, as signs of progress in tackling the euro zone’s debt crisis supported demand for riskier assets.
GBP/USD hit 1.5570 during European morning trade, the pair’s highest since December 13; the pair subsequently consolidated at 1.5573, climbing 0.48%.
Cable was likely to find support at 1.5433, the low of December 15 and resistance at 1.5656, the high of December 12.
Market sentiment found support after European Union finance ministers agreed on Monday to boost International Monetary Fund resources by EUR150 billion with the support of EU allies, in order to tackle the region’s financial woes.
The U.K. refused to participate, however, raising doubts about whether the EU will be able to reach its EUR200 billion target.
Meanwhile, European Central Bank President Mario Draghi reiterated that the bank’s bond purchasing program was temporary and “not infinite” and said the euro zone economy was likely to enter a recession by early next year.
Markets were also eyeing a Spanish auction of three- and six-month government bonds later in the day.
Earlier Tuesday, a report by the Nationwide Building Society showed that its index of consumer confidence rose to 40 in November from its record low of 36 the previous month, still indicating negative sentiment.
Sterling was also higher against the euro with EUR/GBP retreating 0.17%, to hit 0.8372.
Later in the day, the U.K. was to produce a report on retail sales. The U.S. was also to publish data on building permits and housing starts.
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