Forexpros – The pound held gains against the U.S. dollar on Wednesday, hovering close to a six-day high as market sentiment slightly improved although gains were limited by sustained worries over the debt crisis in the euro zone.
GBP/USD hit 1.5938 during European afternoon trade, the pair’s highest since April 3; the pair subsequently consolidated at 1.5904, up 0.26%.
Cable was likely to find support at 1.5808, Tuesday’s low and short-term resistance at 1.5957, the high of March 29.
Risk sentiment found support after the first quarter earnings season kicked off with a surprise profit from aluminum producer Alcoa.
But investors remained jittery as the yield on Spain’s 10-year government continued to tick higher, briefly rising to 6.01% earlier Wednesday, amid concerns that the effects of the European Central Bank’s liquidity operation is wearing off.
Spanish Prime Minister Mariano Rajoy was to make a speech on the country’s recent austerity budget later in the day, as investors remained fearful that deficit reduction targets will not be met and the country will need a bailout.
Meanwhile, last week’s weaker-than-expected data on U.S. nonfarm payrolls continued to cloud the outlook for the global economic recovery.
In the U.K., a report showed earlier that British retail sales rose at their fastest pace so far this year last month, fuelling hopes that the economic recovery is gaining traction.
The British Retail Consortium said like-for-like retail sales rose at an annualized rate of 1.3%, after declining by 0.3% in February.
Elsewhere, the pound was lower against the euro, with EUR/GBP adding 0.19% to hit 0.8263.
Later in the day, the U.S. was to release official data on import prices and crude oil stockpiles, as well as a report on the federal budget balance. The Federal Reserve was also to publish its Beige Book.
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