Forexpros – The pound trimmed gains against the U.S. dollar on Thursday, pulling away from a one-week high after Federal Reserve Chairman disappointed market expectations for further stimulus measures to shore up growth.
GBP/USD pulled back from 1.5600, the pair’s highest since May 30, to hit 1.5553 during U.S. morning trade, still up 0.37%.
Cable was likely to find support at 1.5428, the session low and resistance at 1.5643, the high of May 30.
Speaking before the U.S. Joint Economic Committee, Bernanke said that the Fed remained “prepared to take action” to protect the U.S. economy and financial system if stresses on the financial system escalate, but stopped short of indicating what these actions might be.
The comments came after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending June 2 fell by 12,000 to a seasonally adjusted 377,000, in line with expectations.
The previous week’s figure was revised up to 389,000 from a previously reported 383,000.
Investor confidence broadly strengthened earlier, after the People’s Bank of China said it will lower benchmark interest rates by 0.25%, effective Friday, in a bid to bolster growth in the world’s second largest economy and alleviate the effects of the global economic slowdown.
In the U.K., the Bank of England left interest rates unchanged at 0.5% and maintained its quantitative easing program at GBP325 billion.
Data also showed that the U.K. service sector grew faster than expected last month, matching the strong rate of growth seen in April.
The Markit/CIPS U.K. services purchasing managers’ index came in at 53.3 in May, defying expectations for a decline to 52.7 and unchanged from the previous months reading.
Elsewhere, the pound was higher against the euro with EUR/GBP shedding 0.46%, to hit 0.8082.
Also Thursday, Spain successfully sold EUR2.07 billion of bonds, slightly more than the targeted amount, in an auction which met with solid investor demand, but saw borrowing costs rise.
The auction was viewed as a critical test of investor appetite for the country’s debt, coming just days after Spain warned that it was having difficulty accessing credit markets.
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