Forexpros — The pound advanced to a daily high against the U.S. dollar on Tuesday, but markets remained risk averse as ongoing concerns over possible sovereign debt contagion in the euro zone weighed.
GBP/USD hit 1.6128 during early European trade, the daily high; the pair subsequently consolidated at 1.6113, gaining 0.35%.
Cable was likely to find support at 1.6004, Monday’s low and resistance at 1.6175, last Friday’s high.
Investors remained cautious ahead of a meeting of euro zone leaders in Brussels later in the week to discuss a second bailout for Greece and the overall financial stability of the single currency bloc.
Concerns over sovereign debt contagion to Italy and Spain from Greece escalated on Monday, as Italian and Spanish 10-year bond yields climbed higher and their spreads over benchmark German bonds rose to euro-lifetime highs.
The pound was also slightly higher against the euro, with EUR/GBP slipping 0.10% to hit 0.8779.
Later Tuesday, the U.S. was to publish government data on building permits and housing starts.
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