Forex Pros – The pound erased losses against the U.S. dollar on Wednesday, rising to a three-day high after Finland’s parliament approved Portugal’s bailout package, soothing some concerns over the sovereign debt crisis in the euro zone.
GBP/USD clawed back up from 1.6130, the daily low to hit 1.6235 during European afternoon trade, gaining 0.33%.
Cable was likely to find short-term support at 1.6056, Tuesday’s low and a seven-week low and short-term resistance at 1.6304, the high of May 20.
Earlier in the day, Finland’s parliament approved Portugal’s EUR 78 billion bailout package from the European Union and International Monetary Fund. Finland’s parliament, unlike others in the euro zone, has the right to vote on EU requests for bailout funds.
Also Wednesday, official data confirmed that the U.K. economy grew just 0.5% in the first quarter after contracting by the amount in the last three months of 2010. Annual growth was unrevised at 1.8%.
The report said that household spending contracted by 0.6% on the quarter, its biggest drop since the second quarter of 2009 when the economy was still in recession.
The pound was also higher against the euro, with EUR/GBP shedding 0.49% to hit 0.8669.
Later Wednesday, the U.S. was to publish official data on durable goods orders as well as a government report on crude oil stockpiles.
ForexPros.com
