Forex - Pound hits 3-week highs vs. dollar

The pound rose to three-week highs against the dollar in thin trading conditions on Monday after the Group of 20 nations said a shift away from monetary easing should be carefully managed so that market volatility does not negatively impact on the global recovery.

GBP/USD hit 1.5341 during European afternoon trade, the highest since June 27; the pair subsequently consolidated at 1.5331, gaining 0.44%.

Cable was likely to find support at 1.5256, the session low and resistance at 1.5400.

Finance ministers and central bankers from the G20 nations said Saturday that future changes to monetary policy should be “carefully calibrated and clearly communicated." 

In recent weeks market sentiment has been hit by uncertainty over when the Federal Reserve will start to pull back its USD85 billion-a-month asset purchase program.

The pound remained supported after last week’s minutes of the Bank of England’s July meeting showed that policymakers voted unanimously to keep the bank’s quantitative easing program unchanged, ahead of a decision next month on whether to provide forward guidance on future interest rates.

Sterling was also higher against the euro, with EUR/GBP sliding 0.19% to 0.8588.

The U.S. was to release private sector data on existing home sales later in the trading day.