Forexpros – The pound rose to a seven-day high against the U.S. dollar on Friday, as the announcement of fresh measures to tackle the euro zone’s debt crisis supported risk sentiment, while investors eyed comments by Bank of England Governor Mervyn King later in the day.
GBP/USD hit 1.5678 during European morning trade, the pair’s highest since June 21; the pair subsequently consolidated at 1.5618, advancing 0.64%.
Cable was likely to find support at 1.5486, Thursday’s low and resistance at 1.5734, the high of June 21.
Market sentiment found support after euro zone leaders agreed at a summit in Brussels that the region’s rescue funds could be used to stabilise bond markets without forcing countries that comply with European Union budget rules to adopt extra austerity measures or economic reforms.
The leaders also agreed that the bloc’s future permanent bailout fund, the European Stability Mechanism (ESM), would be able to lend directly to recapitalize banks without increasing a country’s budget deficit.
Euro zone officials added that they would speed up plans to create a single supervisor to oversee the euro zone’s banks by the end of 2012.
In the U.K., a report showed that the Gfk index of consumer climate remained unchanged at minus 29 for July. Analysts had expected the index to ease to a reading of minus 30.
The pound had broadly weakened on Thursday following a string of poor data, adding to expectations that the BoE may implement a third round of quantitative easing measures to shore up growth.
Sterling was lower against the euro with EUR/GBP adding 0.29%, to hit 0.8041.
Later in the day, BoE Governor King was due to speak before the release of the central bank’s financial stability report. The U.K. was also to release a report on consumer confidence.
The U.S. was to release official data on consumer price inflation and personal spending, followed by a report on the purchasing managers’ index in Chicago and revised data from the University of Michigan on consumer sentiment.
Meanwhile, EU leaders are to hold a second day of talks in Brussels.
Forexpros
