Forexpros – The pound climbed to a 10-week high against the U.S. dollar on Tuesday, but further gains were limited as concerns over debt problems in Portugal tempered investor demand for risky assets.
GBP/USD hit 1.5797 during European afternoon trade, the pair’s highest since November 21; the pair subsequently consolidated at 1.5776, gaining 0.42%.
Cable was likely to find support at 1.5698, the session low and resistance at 1.5826, the high of November 16.
The pound tracked early gains in the euro after Greek Prime Minister Lucas Papademos said Monday that negotiators had made “significant progress” in talks aimed at reaching a debt swap plan and aimed to have a definitive agreement by the end of this week.
Market sentiment was also boosted after European Union leaders agreed on a fiscal union pact and signed off on the details of a EUR500 billion permanent bailout fund for the euro zone that will come into force in July.
But investors remained wary amid uncertainty over Portugal, as the yield on the country’s 10-year government bonds remained close to Monday’s euro-era highs at 16%, fuelling concerns that Lisbon may also need a debt restructuring deal.
The pound was almost unchanged earlier, after official data showed that lending in the U.K. remained subdued in December, rising by GBP0.4 billion, below expectations for GBP1.2 billion increase.
A separate report showed that consumer confidence in the U.K. rose to its highest level in seven months in January.
The pound was fractionally higher against the euro, with EUR/GBP dipping 0.06% to hit 0.8360.
Later in the day, the U.S. was to release industry data on house price inflation, as well as a report on manufacturing activity in the Chicago region. The country was also to publish a report on consumer confidence.
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