Forexpros – The pound was steady close to a one-week low against the U.S. dollar in subdued trade on Thursday, as investors remained on the sidelines ahead of monetary policy decisions by the Bank of England and the European Central Bank later in the day.
GBP/USD hit 1.5523 during European morning trade, the pair’s lowest since July 26; the pair subsequently consolidated at 1.5534, inching up 0.01%.
Cable was likely to find support at 1.5469, the low of July 26 and resistance at 1.5623, the high of July 23.
The pound fell sharply on Wednesday, after data showed that manufacturing activity in the U.K. fell at the fastest pace in more than three years in July, fuelling expectations for another round of easing by the BoE in the coming months.
The BoE was to announce its monetary policy decision later in the session, but few expected the bank to make any changes to interest rates or the quantitative easing program.
Trade remained subdued ahead of the upcoming ECB meeting, amid lingering expectations for fresh steps to stem the debt crisis in the euro zone.
Expectations that the ECB may resume its bond buying program, to help lower Spanish and Italian borrowing costs, have been building since EBC President Mario Draghi pledged last week to do whatever it takes to preserve the euro.
In July, the ECB cut its benchmark interest rate to a record low 0.75%, in order to ease pressure on the bloc’s economy.
On Wednesday, the Federal Reserve refrained from implementing fresh easing measures following its policy meeting, but the central bank said economic growth had slowed in the first half of the year and reiterated that it stood ready to provide additional stimulus as necessary.
The pound was lower against the euro, with EUR/GBP rising 0.25% to 0.7889.
Later in the day, the U.K. was to release data on construction sector activity, while the U.S. was to release official data on initial jobless claims.
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