Forexpros – The pound extended losses against the U.S. dollar on Tuesday, as speculation continued over whether the European Central Bank would live up to expectations for fresh steps to combat the crisis in the euro zone.
GBP/USD hit 1.5663 during European afternoon trade, the pair’s lowest since Thursday; the pair subsequently consolidated at 1.5671, shedding 0.24%.
Cable was likely to find support at 1.5610, the low of July 20 and resistance at 1.5729, the session high.
Expectations have been building that the ECB will announce bold measures to tackle the long running debt crisis after central bank head Mario Draghi pledged last week to do whatever is necessary to preserve the euro.
But investors remained wary amid concerns that an inadequate policy response by the ECB could send markets lower.
Germany is opposed to granting a banking license to the bloc’s bailout fund and to the resumption of the ECB’s bond buying program.
The pound remained under pressure after data last week showing a steeper than expected contraction in U.K. economic growth in the second quarter.
The Bank of England was to hold its monthly rate setting meeting on Thursday, but was not widely expected to announce any change to current monetary policy.
Market participants were also eyeing the outcome of the Federal Reserve’s policy setting meeting on Wednesday, amid speculation over whether the U.S. central bank will indicate if further quantitative easing measures are imminent.
The pound was lower against the euro, with EUR/GBP rising 0.40% to 0.7833.
Later Tuesday, the U.S. was to release industry data on house price inflation, a report on consumer confidence and data on manufacturing activity in the Chicago area.
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