Forexpros – The pound was sharply higher against the U.S. dollar on Wednesday, as demand for riskier assets was boosted after major central banks announced coordinated measures to provide liquidity to the global financial system.
GBP/USD hit 1.5777 during U.S. morning trade, the pair’s highest since November 21; the pair subsequently consolidated at 1.5768, jumping 1.10%.
Cable was likely to find support at 1.5525, the days low and resistance at 1.5797, the high of November 21.
The Bank of England, the Federal Reserve, the Bank of Canada, the Bank of Japan, the European Central Bank and the Swiss National Bank said in a joint statement that they had agreed to lower dollar swap rates, in a coordinated move aimed at preventing a lack of liquidity in the global financial system.
The surprise announcement came after the People’s Bank of China said that it plans to cut banks reserve requirement ratios, in an effort to support the world’s second largest economy amid global market turmoil.
Risk appetite was further boosted after a report from payroll processing firm ADP said U.S. private sector employment increased by a seasonally adjusted 206,000 in November, blowing past expectations for an increase of 130,000.
The previous month’s figure was revised up to a gain of 130,000 from a previously reported increase of 110,000.
A separate report showed that manufacturing activity in the Chicago area rose more-than-expected in this month, climbing to a seven-month high.
Also Wednesday, the National Association of Realtors said U.S. pending home sales jumped 10.4% in October and were 9.2% above the same month last year.
Meanwhile, euro zone finance ministers were holding a second day of talks aimed at addressing the escalating debt crisis in the region, after agreeing on measures to expand the bloc’s bailout fund on Tuesday.
Elsewhere, the pound was fractionally lower against the euro, with EUR/GBP inching up 0.03% to hit 0.8539.
Earlier in the day, a report by Gfk showed that U.K. consumer confidence edged up slightly this month, but remained close to a two-year low and the outlook remained downbeat.
The data came one day after Chancellor George Osborne said the U.K. economy was now expected to grow just 0.7% in 2012, down from a March budget forecast of 2.5% growth.
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