The pound erased its early losses against its major counterparts during European deals on Monday, as European stocks rose on hopes of the U.S. Federal Reserve sticking to its ultra loose monetary policy for the foreseeable future.
Investors look ahead to this week’s Fed decision for more indications about its next moves regarding asset purchases and interest rates.
The focus will be on Chair Jerome Powell’s comments about the strength of the economic recovery and the timing of tapering its asset purchase program.
The pound fell earlier in the session as the U.K. government is planning to postpone the scheduled reopening date that was set on June 21.
Senior ministers in the UK signed off a decision to delay the lifting of current curbs beyond June 21.
Prime Minister Boris Johnson is scheduled to affirm the delay at a news conference later in the day.
The pound recovered to 1.4118 against the greenback and 154.99 against the yen, off its early more than a 4-week low of 1.4070 and a 4-day low of 154.32, respectively. The pound may find resistance around 1.425 against the greenback and 157.00 against the yen.
The pound reversed from its prior low of 1.2646 against the franc and a session’s low of 0.8606 against the euro, bouncing off to 1.2688 and 0.8584, respectively. If the pound rises further, 1.28 and 0.84 are likely seen as its next resistance levels against the franc and the euro, respectively.