Pound Higher As Risk Sentiment Improves

The pound firmed against its major counterparts in the European session on Tuesday, as the U.S. debt ceiling deal readies for vote.

Later today, the House Rules Committee is scheduled to consider the package and vote on sending it to the full House for a vote expected Wednesday.

U.S. President Joe Biden and House Speaker Kevin McCarthy expressed confidence on Monday that the debt-ceiling deal will pass Congress.

The deal has to be passed before June 5, when the Treasury will run out of cash to meet its obligations.

Receding concerns over a default on debt payments boosted sentiment.

The pound climbed to a 5-1/2-month high of 0.8630 against the euro and a 5-day high of 1.1217 against the franc, off its early lows of 0.8673 and 1.1154, respectively. The pound may find resistance around 0.84 against the euro and 1.15 against the franc.

The pound advanced to more than a 7-year high of 174.27 against the yen and a 6-day high of 1.2431 against the greenback, from an early low of 172.98 and a 4-day low of 1.2326, respectively. The currency is seen finding resistance around 177.00 against the yen and 1.27 against the greenback.

Looking ahead, Canada current account data for the first quarter, U.S. house price index for March, consumer confidence for May and U.S. Dallas Fed manufacturing index for May are slated for release in the New York session.