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Forex - Pound eases off 6-week low against dollar

Published 05/24/2011, 03:58 AM
Updated 05/24/2011, 03:58 AM

Investing.com – The pound pulled back from a six-week low against the U.S. dollar on Tuesday, as a rally in commodities and stocks boosted risk appetite and comments by a Federal Reserve official weighed on the dollar.

GBP/USD clawed back up from 1.6056, the pair’s lowest since April 1 to hit 1.6129 during European morning trade, gaining 0.05%.

Cable was likely to find support at 1.5970, the low of April 1 and resistance at 1.6232, Monday’s high.

On Monday, St. Louis Fed President James Bullard said that the central bank is likely to keep interest rates on hold after the second round of quantitative easing expires next month, to give more time to evaluate the strength of the U.S. economy.

Bullard also said the U.S. economy faces potential headwinds if ongoing fears about the future of the euro create "prolonged" market turmoil.

Meanwhile, the pound was fractionally lower against the euro, with EUR/GBP easing up 0.04% to hit 0.8752.

Earlier Tuesday, rating agency Moody's said that it may cut its rating on 14 British lenders, including Lloyds and Royal Bank of Scotland, because U.K. regulators appear less willing to bail out banks in the future.

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