Sterling extends rally versus dollar after King comments

NEW YORK (Forex News Now) – The pound extended its recent rally against the dollar on Wednesday, after Bank of England Governor Mervyn King signaled the central bank was in no hurry to raise interest rates.

In New York afternoon currency trading, GBP/USD hit 1.5608, up 0.09 percent on the day, after retreating slightly from the daily high of 1.5636, cable’s highest since Feb. 18.

In comments to a cross-party Treasury committee, King also warned that several risks remained to the U.K. recovery.

“The wider economic problems around the world underline the fact that we cannot be confident that the recovery in demand, output and employment here in the UK will be sustained,” the BoE chief said.

According to forex analysis, GBP/USD was likely to touch support around Monday’s low, 1.5409, and encounter immediate resistance around the high of Feb 17, 1.5816.

Also Wednesday, Commerce Department data showed that factor orders for U.S. durable goods unexpectedly slid in June, heightening fears that the U.S. economic recovery was faltering.

Elsewhere, sterling fell versus the yen: GBP/JPY traded at 136.81, down 0.19 percent.