Forexpros – The pound was steady against the U.S. dollar on Tuesday, trading close to a five-month high as investors awaited the outcome of government debt auctions by The Netherlands and Spain later in the day.
GBP/USD hit 1.6154 during European morning trade, the pair’s highest since October 31; the pair subsequently consolidated at 1.6149, gaining 0.11%.
Cable was likely to find support at 1.6037, last Friday’s low and resistance at 1.6252, the high of September 2.
The Netherlands was due to auction as much as EUR2.5 billion of two and 25-year government bonds. Investors remained concerned that the country could lose its triple-A credit rating following the collapse of the government on Monday after talks on the 2013 austerity budget failed.
Meanwhile, Spain was to auction a small amount of three and six-month bonds after the country’s central bank said Monday that the economy has entered a recession.
The pound remained supported by diminished expectations for another round of monetary easing by the Bank of England, while recent robust economic data indicated that the economic recovery is strengthening.
Sterling was slightly lower against the euro, easing back from a 20-month high, with EUR/GBP edging up 0.06% to hit 0.8160.
Later Tuesday, the U.K. was to release official data on public sector borrowing, while the U.S. was to release an industry data on house price inflation, as well a report on consumer confidence and government data on new home sales.
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