Investing.com – The pound extended earlier gains against the U.S. dollar on Tuesday, surging to hit a 2-month high, after the Bank of Japan’s decision to begin monetary easing added to fears that the Federal Reserve would also resume monetary easing.
USD/GBP hit 1.5930 during European afternoon trade, the pair’s highest since August 9; the pair subsequently consolidated at 1.5916, gaining 0.55%.
Cable was likely to find support at 1.5748, Monday’s low and short-term resistance at 1.5995, the high of August 9.
The Bank of Japan's decision earlier Tuesday to cut interest rates to near zero and embark on a monetary easing program weakened confidence in currencies, resulting in the dollar coming under broad selling pressure.
The decision also exacerbated fears that the Fed would implement further quantitative easing in the coming months. On Monday, Fed chair Ben Bernanke said that that the central bank’s first round of large-scale asset purchases improved the economy and that further buying will probably help more.
Meanwhile, the pound was down against the euro, with EUR/GBP gaining 0.53% to hit 0.8693.
Earlier Tuesday, data showed that the service sector in the U.K. grew unexpectedly in September.
USD/GBP hit 1.5930 during European afternoon trade, the pair’s highest since August 9; the pair subsequently consolidated at 1.5916, gaining 0.55%.
Cable was likely to find support at 1.5748, Monday’s low and short-term resistance at 1.5995, the high of August 9.
The Bank of Japan's decision earlier Tuesday to cut interest rates to near zero and embark on a monetary easing program weakened confidence in currencies, resulting in the dollar coming under broad selling pressure.
The decision also exacerbated fears that the Fed would implement further quantitative easing in the coming months. On Monday, Fed chair Ben Bernanke said that that the central bank’s first round of large-scale asset purchases improved the economy and that further buying will probably help more.
Meanwhile, the pound was down against the euro, with EUR/GBP gaining 0.53% to hit 0.8693.
Earlier Tuesday, data showed that the service sector in the U.K. grew unexpectedly in September.