British pound recorded gains against the US dollar for the first time in three days ahead of the reports on consumer confidence, house prices and growth out of the United Kingdom later this week.
GBP/USD hit a session high at 1.6054 at 8:10 GMT, after which consolidation followed at 1.6045, gaining 0.26% for the day. Support was likely to be received at September 20th low, 1.5985, while resistance was to be encountered at September 19th high and also an eight-month high, 1.6150.
The sterling has gained strength at least by 1% against all of its 16 major peers during the past six months, as signals appeared that the economy might be improving. “It’s a very quiet week in the U.K.,” said Michael Sneyd, a foreign-exchange strategist at BNP Paribas SA in London, cited by Bloomberg. “Dollar factors will continue to dominate. The data calendar is very light so we could see pound-dollar remain somewhat supported.”
UKs Gross Domestic Product probably rose by 0.7% during the second quarter of the year, according to median estimate of experts participated in a survey by Bloomberg News. Official data by the Office for National Statistics was to be released on September 26th. One day after that reports were expected to show that house prices in the country climbed and consumer confidence improved in September. Homes approved for construction in the UK increased 49% during the second quarter of the year, as government assistance facilitated mortgage lending and building permits became easier to obtain.
In the mean time, the greenback was under pressure after the decision by the Federal Reserve to leave stimulus intact, as the central bank said it wanted more evidence of a sustained economic recovery to be obtained before making a move towards a reduction of scale of monthly bond purchases.
Federal Open Market Committee (FOMC) voting member William Dudley is expected to speak today, after the comments made by Bank of St. Louis President James Bullard on Friday, who said that Fed’s decision not to taper in September was “close” and also indicated a possible small reduction in asset purchases in October. The US dollar received a certain support after this statement.
Elsewhere, the British pound was higher against the euro, with EUR/GBP cross erasing 0.34% on a daily basis to trade at 0.8416 at 11:42 GMT. GBP/JPY pair, on the other hand, was losing 0.18% to trade at 158.85 at 11:44 GMT. The sterling has appreciated 5.6% during the past six months, or the best performing currency among the 10 developed-nation currencies, tracked by Bloomberg Correlation-Weighted Indexes. The US dollar has decreased 0.3%, while the euro has gained 4.2% during the same period.
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