Pound higher vs dollar, but gains limited

Pound higher vs dollar, but gains limited

16 March 2015, 11:48
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On Monday the pound climbed versus its U.S. peer, though demand for sterling remained pressured after Friday's comments by Bank of England Governor Mark Carney.

GBP/USD hit 1.4798 during European morning trade, the session high; the pair subsequently consolidated at 1.4783, adding 0.25%. Cable was likely to find support at 1.4696, Friday's low and a 20-month low and resistance at 1.4896, the high of March 13.

The pound remained fragile after BoE Governor Mark Carney said on Friday that interest rates could remain on hold beyond the beginning of next year.

On Friday, the dollar strengthened broadly after downbeat U.S. data dampened optimism over the strength of the economy, weighing on market sentiment.

The U.S. Department of Labor reported that producer prices fell 0.5% last month, confounding expectations for a 0.3% gain, after a 0.8% decline in January.

At the same time, the University of Michigan said that its consumer sentiment index fell to a four-month low of 91.2 this month from 95.4 in February, disappointing expectations for a rise to 95.5.

Market participants were now eyeing Wednesday’s Federal Reserve statement to see if it would drop its reference to being patient before raising rates and signal that it is ready to hike rates depending on economic data.

Sterling was lower against the euro, with EUR/GBP edging up 0.17% to 0.7128.

The U.S. is expected to produce reports on industrial production and manufacturing activity in the New York region, as well as private sector data on the housing market.

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