Forexpros – The pound trimmed gains against the U.S. dollar on Monday, pulling back from a three-day high following comments from Bank of England Governor Mervyn King.
GBP/USD pulled back from 1.5594, the pair’s highest since November 23 to hit 1.5546 during U.S. morning trade, still up 0.68%.
Cable was likely to find support at 1.5339, the low of October 4 and resistance at 1.5691, the high of November 22.
The pound came under pressure after Governor King warned that the scale of shocks that may yet emerge from the euro zone are still difficult to identify.
Earlier in the day, the Organization for Economic Co-operation and Development cut its growth forecast for the U.K. in 2012 to 0.5% from 1.8% in May, and urged the Bank of England to increase its bond-buying stimulus program by GBP125 billion.
The pound tracked the euro higher earlier, boosted by speculation that European Union leaders are negotiating the details of a fiscal pact to halt the spread of the region’s debt crisis.
The pact would make budget discipline legally binding and enforceable by European authorities and would give the European Central Bank more scope to undertake large scale bond purchases.
In the U.S., official data showed that new home sales rose to 307,000 units in October, below expectations for an increase to 312,000.
New home sales for September were revised down to 303,000 units from a previously reported 313,000 units.
Elsewhere, sterling was down against the euro with EUR/GBP rising 0.26%, to trade at 0.8597.
Also Monday, an industry report showed that U.K. retail sale volumes declined significantly more-than-expected in November, falling at the fastest rate since March 2009.
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