On Friday, the pound rose to nearly 2.5 week high against the US dollar as market sentiment improved on the positive Greek news, while expectations of rising interest rates in the UK continues to support the demand for the pound sterling.
During European morning trade, GBP/USD pair reached 1.5671, its highest level since Wednesday; the pair subsequently consolidated at 1.5655, gaining 0.29%.
The pair is likely to receive support at 1.5448, the low of July 14 and resistance at 1.5736, the high of July 1st.
Market sentiment improved after euro zone ministers agreed on Thursday to grant Greece a bridge loan in the amount of 7 billion euro, to keep the country's economy alive until a full detailed agreement bailout program.
On Friday, the loan is expected to be approved by all EU member states.
The news comes after the European Central Bank rose its emergency lending to Greek banks to 900 million euro and mentioned that it works on the basis of the prerequisites that Greece still remains in the Eurozone.
The pound has also increased after the beginning of the week the Bank of England Governor, Mark Carney, said that the time for a rate hike is coming.
Speaking before the Committee of the Treasury in Westminster on Tuesday, Carney said that "the point at which interest rates may start to rise is closely linked to economic performance, a constant trend of growth, strengthening household spending, while some counterweight may be the deflation coming from outside."
He also reiterated that the rate increase will be gradual.
Meanwhile, the decline of the dollar is expected to be limited after the speech of the Federal Reserve, Janet Yellen, at the US Congress, maintaining the investors’ assumption that interest rates still will be raised later this year.
However, speaking to the Senate Banking Committee on Thursday, a day after the speech to the Committee on Financial Services of the House of Representatives, Yellen avoided specifying exact dates when the Fed is likely to start raising interest rates from virtually zero.
The pound was fractionally higher against the euro; EUR/GBP fell 0.09% to 0.6961.