Investing.com - The pound rose to near five-year highs against the dollar on Monday after Sunni insurgents continued their march to Baghdad, while an International Monetary Fund decision to cut its U.S. growth forecast for 2014 weighed on the greenback as well.
In U.S. trading on Monday, GBP/USD was trading up 0.10% at 1.6985, from a session low of 1.6960 and off a high of 1.7011.
Cable was likely to find support at 1.6739, Wednesday''s low, and resistance at 1.7042, the high from Aug. 6, 2009.
The International Monetary Fund cut its 2014 U.S. economic growth forecast, pointing out that the unusually harsh winter along with a “still-struggling housing market” will drag on recovery.
The IMF said it now expects the U.S. economy to expand 2% in 2014, down from its forecast of 2.8% in April.
Elsewhere, concerns over the ongoing Sunni insurgency in Iraq continued to weigh on market sentiment by stoking fears that escalating conflict could dampen U.S. recovery, especially if the conflict disrupts the country''s oil sector.
Positive U.S. data, meanwhile, halted the pound''s rise slightly.
The Federal Reserve Bank of New York reported earlier that its general business conditions index increased to 19.28 this month from 19.01 in May. Analysts had expected the index to decline to 15.0.
A separate report showed that U.S. industrial production rose by 0.6% last month, beating forecasts for a 0.5% gain.
The pound, meanwhile, continued to see support after Bank of England Governor Mark Carney last week said interest rates may rise earlier than markets have been anticipating.
"There’s already great speculation about the exact timing of the first rate hike and this decision is becoming more balanced," Carney said in a speech he delivered on Thursday.
"It could happen sooner than markets currently expect."
Elsewhere, sterling was down against the euro, with EUR/GBP up 0.15% at 0.7994, and down against the yen, with GBP/JPY down 0.14% at 172.88.
On Tuesday, the U.S. is to produce data on housing starts, building permits and consumer prices.