Forexpros – The pound hit a fresh session high against the U.S. dollar on Thursday, as market sentiment improved after Italian borrowing costs eased and after the Bank of England held pat on rates and announced no fresh easing measures.
GBP/USD hit 1.5940 during European early afternoon trade, the session high; the pair subsequently consolidated at 1.5932, gaining 0.11%.
Cable was likely to find short-term support at 1.5875, the low of November 3 and resistance at 1.6119, Wednesday’s high.
Italy’s Treasury auctioned EUR5 billion of one-year Treasury bills at an average yield of 6.08%, the highest since September 1997, but still well below analyst expectations of 7%.
Following the auction, the yield on 10-year Italian bonds fell back below the 7% mark, a level widely considered unsustainable for continued borrowing.
In the U.K., the BoE left interest rates unchanged at a record low 0.5% earlier.
In October, the central bank restarted its quantitative easing program with a plan to buy a further GBP75 billion of government bonds, on top of the GBP200 billion of purchases it made from 2009 to 2010.
Meanwhile, the pound was slightly lower against the euro, with EUR/GBP rising 0.42% to hit 0.8545.
Also Thursday, former European Central Bank vice-president Lucas Papademos was named as Greece’s new interim prime minister, following days of talks amid a scramble to avert an imminent Greek default.
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