Investing.com - The pound edged higher against the U.S. dollar on Monday, but gains were expected to remain limited as demand for the greenback remained supported by expectations for an early rate hike by the Federal Reserve.
GBP/USD hit 1.6366 during European morning trade, the session high; the pair subsequently consolidated at 1.6331, rising 0.28%.
Cable was likely to find support at 1.6244, the low of September 18 and resistance at 1.6408, the high of September 18.
The dollar remained supported as signs that the economic recovery is making solid progress fuelled expectations that the Fed will hike interest rates sooner than markets are expecting.
Last week, the Fed offered fresh guidance on its plans to raise interest rates, outlining in more detail how it will start to raise short term interest rates when the time comes.
The pound rose to two-week highs against the greenback on Friday after voters in Scotland chose to stay in the U.K. by a significant margin in a independence referendum, defying opinion polls which had indicated that the final result would be too close to call.
A total of 55% of voters voted to reject independence, while 45% voted in favor of it.
The pound's rally was short lived however as investors began to turn their attention back towards the Bank of England’s monetary policy stance, with the referendum issue out of the way.
Sterling was higher against the euro, with EUR/GBP slipping 0.14% to 0.7866.
Later in the day, the U.S. was to release data on existing home sales.