ForexPros Daily News October 6, 2010

ForexPros Daily News October 6, 2010

Forex – GBP/USD hits fresh 2-month high as dollar slumps

Forex Pros – The pound edged higher against the U.S. dollar on Wednesday, rising to a fresh 2-month high as concerns that the Federal Reserve will begin fresh monetary easing to stimulate U.S. growth weighed on the dollar.

GBP/USD hit 1.5940 during European morning trade, the pair’s highest since August 9; the pair subsequently consolidated at 1.5990, gaining 0.07%.

Cable was likely to find support at 1.5751, Tuesday’s low and resistance at 1.5995, the high of August 9.

The Bank of Japan’s decision on Tuesday to cut interest rates to near zero and embark on a monetary easing program further added to fears that the Fed would follow suit.

On Monday, Fed Chairman Ben Bernanke said that the bank aided the U.S. economy through its USD 1.75 trillion purchases of mortgage debt and Treasuries that ended in March 2010 and that more buying would help further.

Meanwhile, the pound was down against the euro, with EUR/GBP gaining 0.10% to hit 0.8717.

Later in the day, the U.S. was to release ADP non-farm payrolls data.

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