Investing.com - Sterling was trading within striking distance of six-year highs against the dollar on Monday, remaining supported above the 1.70 level by expectations for a U.K. rate hike in the second half of this year.
GBP/USD was steady at 1.7038, not far from the high of 1.7062 struck on June 19, the strongest level since October 2008.
Cable was likely to find support at 1.6969, Thursday’s low and resistance at 1.7062.
Data on Friday confirmed that the U.K. economy expanded by 0.8% in the first three months of 2014. The economy grew at an annual rate of 3.0% in the first quarter, the fastest since 2007.
Earlier Friday, Bank of England Governor Mark Carney indicated that rates were unlikely to return to their pre-crisis levels of 5%, but instead could be expected to rise to around 2.5% by the first quarter of 2017.
The BoE announced a new affordability test on banks and a cap on home loans on Thursday, in a bid to prevent the housing market from destabilizing the U.K. economy.
Demand for sterling continued to be underpinned as the new measures did little to alter expectations that the BoE will raise interest rates ahead of other central banks.
The dollar remained broadly weaker after data last week showing a sharper-than-expected 2.9% contraction in the U.S. economy in the first quarter underlined the view that the Federal Reserve will keep rates on hold for an extended period.
Investors were turning their attention to the U.S. nonfarm payrolls report, due to be released one day early on Thursday, for further indications on the strength of the labor market.
Elsewhere, the pound was almost unchanged against the euro, with EUR/GBP at 0.8010, holding above the more than one-and-a-half year low of 0.7958 struck in mid-June.
Please LIKE our Facebook page - it makes us stronger: