FX: Pound shoots up to 1-month high against dollar
Forex Pros – The pound shot up to a 1-month high versus the U.S. dollar on Monday, breaking above the 1.47 mark on mounting hopes that the global economic recovery was on track.
GBP/USD soared 1.61% hit 1.4784 during European afternoon trade, the pair's highest since May 13. Cable was likely to find support at 1.4345, the low of June 8, and resistance at 1.5045, the high of May 12.
Sterling's ascent came despite a downgrade of the U.K. economic forecast earlier in the day. The Office for Budget Responsibility, the newly created independent U.K. body charged with producing forecasts, said Britain's economy will grow slower than the Labour government predicted its last budget.
According to the office, the British economy will grow 2.6% in 2011, significantly slower than the 3.25% predicted by the then Chancellor of the Exchequer, Alistair Darling, in March.
The pound also surged against the yen on Monday, with GBP/JPY jumping a massive 1.86% to reach 135.84 .
Later in the day, Adam Posen, a member of the BoE's Monetary Policy Committee, was due to speak at an event in New York, where traders will likely scrutinize his comments for clues to future shifts in monetary policy.
