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Forex - Pound moderately lower vs. stronger greenback

ForexSep 23, 2015 04:32AM ET
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© Reuters. Pound edges lower vs. dollar amid U.S. rate hike talk - The pound was moderately lower against the U.S. dollar on Wednesday, as demand for the greenback remained broadly supported by hopes for a U.S. rate hike before the end of the year.

GBP/USD hit 1.5298 during European morning trade, the pair's lowest since September 8; the pair subsequently consolidated at 1.5346, slipping 0.08%.

Cable was likely to find support at 1.5266, the low of September 8 and resistance at 1.5456, the high of September 15.

The dollar remained supported after comments by some Federal Reserve officials Monday night indicated that a U.S. rate hike is still on the cards this year.

St. Louis Fed President James Bullard and Atlanta Fed President Dennis Lockhart indicated in separate remarks that the U.S. central bank is still likely to raise short-term interest rates this year.

Investors were looking ahead to a speech by Fed Chair Janet Yellen later in the week for additional clarity on the bank’s decision last week to leave interest rates on hold.

Meanwhile, the pound remained under pressure after the U.K. Office for National Statistics reported on Tuesday that public borrowing rose to £12.1 billion in August from £10.7 billion a year earlier.

It was the widest budget deficit for the month of August since 2012 and was well above economists' forecasts of 9.0 billion.

Sterling was steady against the euro, with EUR/GBP at 0.7245.

Sentiment on the single currency was fragile after the release of mixed data on manufacturing and service sector activity from the euro zone.

Research group Markit said that Germany's manufacturing purchasing managers' index fell to 52.5 in September from 53.3 the previous month, while the services PMI ticked down to 54.3 from 54.9.

France's manufacturing PMI ticked up to 50.4 this month from 48.3 in August, while the services PMI rose to 51.2 from 50.6.

For the entire euro zone, the composite PMI, which includes both manufacturing activity and services, slipped to 53.9 in September, Markit reported, from a reading of 54.3 in August.

Forex - Pound moderately lower vs. stronger greenback

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