Forexpros – The pound remained higher against the U.S. dollar on Monday, supported by new hopes of progress in Spain after the European Union agreed to help bailout the country’s struggling banks, but sustained euro zone debt worries limited gains.
GBP/USD hit 1.5582 during U.S. morning trade, the pair’s highest since June 7; the pair subsequently consolidated at 1.5519, rising 0.30%.
Cable was likely to find support at 1.5474, the low of May 30 and resistance at 1.5599, the high of June 7.
Risk sentiment was boosted earlier, after Spain’s Finance Minister Luis de Guindos said the European Union will grant Spain a loan of up to EUR100 billion that the government will use to recapitalize the country’s ailing banking sector.
Spanish Prime Minister Mariano Rajoy on Sunday expressed hope that the bailout would help the country’s ailing economy, saying, “The European project, the future of the euro and our banking system all won new credibility.” But he warned against expecting a quick turnaround following the banking rescue.
But investors remained cautious as details of the Spanish bailout agreement remained unclear, with the exact amount Spain is to receive still to be decided, after the results of independent banking audits are published later this month.
Meanwhile, uncertainty over the outcome of a Greek general election on June 17, which could determine the course of the country’s future in the euro zone, also weighed.
Elsewhere, sterling was also higher against the euro with EUR/GBP falling 0.21%, to hit 0.8074.
Also Monday, official data showed that industrial production in France rose far more-than-expected April, jumping 1.5% after a 1% decline the previous month. Analysts had expected industrial production to rise 0.1% in April.
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