Forex Pros – The pound erased losses against the U.S. dollar on Monday, rebounding from the daily low as the yen stabilized after the Bank of Japan took unprecedented steps to boost market liquidity following Friday’s earthquake and tsunami.
GBP/USD rebounded from 1.6027, the daily low; to hit 1.6099 during European morning trade, easing up 0.12%.
Cable was likely to find support at 1.5976, Friday’s low and a three-week low and resistance at 1.6212, Thursday’s high.
The BoJ announced earlier that it was pumping a record JPY15 trillion into the financial system and doubling the size of its asset-purchase program to JPY10 trillion to bolster confidence in the economy in the wake of a massive earthquake, a tsunami and a nuclear emergency.
Earlier in the day, Japan’s Ministry of Economy, Trade & Industry said a hydrogen explosion had occurred at reactor three in the nuclear power plant in Fukushima, north of Tokyo, two days after an explosion hit reactor one.
However, officials said the reactor core was still intact and that radiation levels were below legal limits.
Meanwhile, the pound was down against the euro, with EUR/GBP rising 0.19% to hit 0.8663.
The pound has rallied against the dollar this year, amid expectations that the Bank of England will raise interest rates in the coming month, although uncertainty remains over the timing due the uneven nature of the U.K. economic recovery.
ForexPros.com
