Forex - GBP/USD holds steady, focus on Cyprus

Investing.com - The pound held steady against the U.S. dollar on Tuesday, after the release of upbeat U.S. housing data, while concerns over the recent announcement of a bailout deal for Cyprus persisted.

GBP/USD hit 1.5145 during U.S. morning trade, the session high; the pair subsequently consolidated at 1.5118, up 0.06%.

Cable was likely to find support at 1.5067, Friday’s low and resistance at 1.5220.

Investors remained cautious amid concerns that the parliament in Cyprus could reject a bill on a bank deposit tax needed for the country to secure a bailout in a vote later Tuesday.

Earlier in the day, the government submitted a new deposit tax bill that would scrap the tax on bank deposits below EUR20, 000.

In the U.S., official data showed that the number of building permits issued increased to the highest level since June 2008 in February, while housing starts rose more-than-expected underlining the view that the country’s economic recovery is gaining momentum.

The Commerce Department said the number of building permits issued in February rose 4.6% to a seasonally adjusted 0.946 million, above expectations for a 2.3% increase to 0.925 million units.

U.S. housing starts rose by 0.8% last month to a seasonally adjusted 0.917 million, compared to expectations for an increase to 0.915 million.

Earlier Tuesday, the pound found support after official data showed that consumer price inflation in the U.K. ticked up to a nine-month high of 2.8% in February, with higher energy prices adding to the cost of living.

The Bank of England was to publish the minutes of its March meeting on Wednesday after the minutes of the bank’s February meeting showed the policymakers were leaning towards restarting the asset purchase program.

Sterling was higher against the euro, with EUR/GBP declining 0.40% to 0.8542.

Investors were looking ahead to the outcome of the Federal Reserve’s policy meeting on Wednesday after data last week showing that U.S. inflation was contained left the way clear for the bank to continue its asset purchase program.