Pound reaches its three-month highs December 19 2012

british_pound
British pound GBP

The pound widened its gains against the American dollar today, reaching three-month highs as investor sentiment became stronger among increased optimism over a negotiations to avoid the U.S. fiscal cliff.

During the European afternoon trade, cable hit the level 1.6306, which is the highest level for GBPUSD since September 21. Later on the pair found consolidation at 1.6299, taking up 0.30%.

GBPUSD was supposed to find support at 1.6244, bottom level for this session, and resistance at 1.6422, the highest level from of August 30, 2011.

Risk appetite was enhanced by prospects of progress in negotiations that have the purpose to avoid the fiscal cliff, automatic tax hikes and spending cuts due to take effect on January 1, which traders apprehend may threaten America and the global growth.

In the euro zone, official data marked that German business confidence is still developing in December, despite the deteriorating outlook for the euro zone economy.

The pound was partly supported by the Bank of England’s December meeting, which announced that the monetary policy committee was divided into eight-to-one, with just one member in favor of further easing , while the vote to leave interest rates remained without any change at 0.5%.

The British pound reached a two-month low against the stronger euro, with EURGBP trading at 0.8156.

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