The pound hit a two-day high against the U.S. dollar on Monday, as the dollar was weighed by concerns that the threat to economic growth staged by higher oil prices would see the U.S. Federal Reserve hold interest rates at record lows.
GBP/USD hit 1.6208 during European morning trade, the pair’s highest since last Thursday; the pair subsequently consolidated at 1.6191, gaining 0.45%.
Cable was likely to find support at 1.6070, the days low and resistance at 1.6253, last Thursday’s high.
Crude futures for delivery in April traded at USD98.62 a barrel on the New York Mercantile Exchange, after peaking at USD99.96 earlier in the day.
The anti-government demonstrations that swept the Middle East over the past month spread to Oman on Sunday, with protesters clashing with security forces. Meanwhile, in Libya, leader Muammar Gaddafi still controlled the capital Tripoli, after an uprising took control of the eastern part of the country.
The dollar has been hurt by the recent spike in oil prices amid fears over the inflationary impact on the U.S. economy.
Meanwhile, the pound was down against the euro, with EUR/GBP easing up 0.07% to hit 0.8540.
Later in the day, the U.S. was to publish industry data on pending home sales as well as a report on manufacturing activity in the in the Chicago area. The U.S. was also to release official data on personal consumption expenditure and consumer price inflation.