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Forex - GBP/USD slides before BoE decision

By Investing.com  |  Forex  |  Jul 04, 2013 08:23AM GMT  |   Add a Comment
 
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Investing.com - The pound was lower against the dollar on Thursday as investors awaited policy announcements by the Bank of England and the European Central Bank later in the day, as well as Friday’s U.S. nonfarm payrolls report.

Forex - GBP/USD slides before BoE decision
GBP/USD hit 1.5238 during European morning trade, the session low; the pair subsequently consolidated at 1.5249, shedding 0.19%.

Cable was likely to find support at 1.5182, the low of July 1 and resistance at 1.5345, the high of June 27.

The BoE was widely expected to keep its benchmark interest rate on hold after its policy meeting later Thursday, the first under the leadership of new Governor Mark Carney.

Data on Wednesday showed that service sector activity in the U.K. expanded at the fastest pace since March 2011 in June, boosting the outlook for second quarter growth and dampening expectations for additional stimulus measures by the central bank.

A report earlier in the week showed that manufacturing activity in the U.K. expanded at the fastest pace in more than two years last month.

The ECB was expected to leave interest rates on hold following its policy meeting and to reiterate that an exit from loose monetary policy remains distant.

Concerns over a political crisis in Portugal eased on Thursday, amid hopes that the government wouldn’t collapse following talks between the coalition partners overnight.

The future of the country's coalition government was thrown into doubt earlier in the week, following the resignation of country’s foreign minister and finance minister in protest over government austerity policies.

Meanwhile, investors were awaiting Friday’s U.S. nonfarm payrolls report for further clues on when the Federal Reserve may decide to unwind its USD85 billion-a-month stimulus program.

Data on Wednesday showed that the U.S. private sector added 188,000 jobs in June, more than expectations for an increase of 160,000.

Sterling edged lower against the euro, with EUR/GBP edging up 0.08% to 0.8519.

Trade volumes were expected to remain light on Thursday, with markets in the U.S. closed for the Independence Day holiday.




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