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Forex - GBP/USD hits 2-month low ahead of BoE meeting

Published 09/08/2011, 04:29 AM
Updated 09/08/2011, 04:29 AM

Investing.com – The pound fell to a two-month low against the U.S. dollar on Thursday, amid speculation that the Bank of England would announce fresh stimulus measure to bolster U.K. growth after its policy-setting meeting later in the day.

GBP/USD hit 1.5914 during European trade, the pair’s lowest since July 13; the pair subsequently consolidated at 1.5931, shedding 0.36%.

Cable was likely to find support at 1.5780, the low of July 12 and a five-month low and resistance at 1.6038, Wednesday’s high.

Data on Wednesday showed that industrial output in the U.K. fell unexpectedly in July. The report came after data last week showing the biggest monthly contraction in manufacturing for more than two years and the biggest one-month drop in service sector growth in more than a decade.

The string of negative data, combined with concerns over the outlook for global growth has prompted speculation the BoE may resort to quantitative easing to shore up U.K. growth.

The pound was also lower against the euro, with EUR/GBP rising 0.19% to hit 0.8833.

Also Thursday, the U.S. was to publish its weekly report on initial jobless claims, while Federal Reserve Chairman Ben Bernanke was to speak. In addition, U.S. President Barack Obama was to make a speech to Congress to propose new employment measures.

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