British pound was trading little changed against the US dollar on Monday, amid prospects of a potential delay of Federal Reserves monetary stimulus scale back, which was still causing pressure upon the greenback.
GBP/USD hit a session high at 1.6181 at 7:50 GMT, after which consolidation followed at 1.6165, dipping a mere 0.01% for the day. Support was likely to be found at October 18th low, 1.6142, while resistance was to be encountered at October 1st high and also the highest point in one month, 1.6259.
The Sterling recorded gains against all of its 16 major rivals ahead of the official report later in the week, that analysts expected will show economy of the United Kingdom expanded at a faster than anticipated pace during the third quarter of the year. Nations Gross Domestic Product probably rose 0.8% in Q3, according to a survey of experts. The Office for National Statistics (ONS) will release the official data on Friday.
In addition, Bank of England (BoE) policymaker Ben Broadbent stated that officials from the central bank will only consider lifting the benchmark interest rate once the economic recovery shows signs of stability, according to Bloomberg. Broadbent also said in a television interview on Sky News yesterday, that signs of inflation were not likely to trigger BoEs monetary policy tightening earlier than they have signaled. “We want to ensure that this recovery, which is only just beginning in a way, continues and is not choked off by a premature rise in interest rates”, he said, cited by the same media.
Last but not least, property-website operator Rightmove Plc reported earlier on trading Monday that house prices in the UK climbed 2.8% in October on a monthly basis and 3.8% on annual basis. In September compared to August the corresponding index fell 1.5%, while its annual performance showed a 4.5% advance. According to the same operator, the average asking price of a house in London increased more than 10% or more than 50 000 GBP in October compared to the preceding month.
Meanwhile, the US dollar remained still under pressure against major peers amid concerns that Federal Reserve Bank’s monetary policy will be strongly influenced. The central bank will probably put off the first reduction to its asset-purchasing program until March next year, according to the median estimate of 40 experts participated in a survey by Bloomberg, conducted on October 17th-18th. Before the shutdown in Washington global markets were expecting that the Federal Reserve will begin phasing out its asset purchases at its meeting on policy on October 30th, or in early December. Federal Reserve policymakers had pledged that since December a raise in the base interest rate would not be considered as long as the unemployment rate in the country exceeds 6.5%.
Elsewhere, the sterling was slightly higher against the euro, as EUR/GBP cross dipped 0.07% on a daily basis to trade at 0.8461 at 11:23 GMT. GBP/JPY pair was gaining 0.28% to trade at 158.66 at 11:23 GMT. The pound has risen 5.4% during the past six months, or the best-performing currency among 10 developed-nation currencies, which are tracked by Bloomberg Correlation-Weighted Indexes. The euro has appreciated 3.8% during the same period, while the US dollar has lost 1.4% of its value.