Forex Pros – The pound extended gains against the broadly weaker U.S. dollar in thin trade on Wednesday, as risk appetite sharpened and concerns over Standard & Poor’s downgrade of its outlook on U.S. credit ratings eased.
GBP/USD hit 1.6388 during European early afternoon trade, the pair’s highest since April 11; the pair subsequently consolidated at 1.6374, gaining 0.36%.
Cable was likely to find support at 1.6229, Tuesday’s low and resistance at 1.6425, the high of April 11 and a 15-month high.
Earlier in the day, the Bank of England’s April policy meeting minutes showed that policymakers maintained their 6-3 split in favor of keeping rates on hold.
The monetary policy committee said mixed economic data over the month did not provide clear guidance about the extent to which the economy had recovered since the slowdown at the end of 2010.
“An increase in Bank rate in current circumstances could adversely affect consumer confidence, leading to an exaggerated impact on spending,” the minutes said.
However, policymakers said near-term inflation was likely to be higher than forecast in February due to higher energy and commodity prices and there was still a significant risk that inflation would exceed 5%.
Meanwhile, the pound was sharply lower against the euro, with EUR/GBP jumping 0.95% to hit 0.8870.
Later Wednesday, the U.S. was to publish industry data on existing home sales.
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