Forexpros – The euro extended losses against the pound on Thursday, falling to a two-day low after the Bank of England left its benchmark interest rate unchanged and held off from increasing its asset-buying program.
EUR/GBP hit 0.8760 during European afternoon trade, the pair’s lowest since Tuesday; the pair subsequently consolidated at 0.8766, shedding 0.55%.
The pair was likely to find support at 0.8731, Tuesday’s low and a two-week low and resistance at 0.8841, the days high and a one-week high.
The BoE said it was maintaining the benchmark interest rate at 0.50%, in a widely expected move. The bank also said it was to maintain the stock of asset purchases financed by the issuance of central bank reserves at GBP200 billion.
The pound weakened earlier as a recent string of negative U.K. data, combined with concerns over the outlook for global growth prompted speculation the BoE may resort to quantitative easing to shore up U.K. growth.
The euro remained under pressure ahead of the European Central Bank’s policy-setting meeting later in the day, amid speculation that the ongoing sovereign debt crisis in the single currency bloc and the bleak outlook for global growth would prompt policymakers to halt the bank’s monetary tightening cycle.
The euro was also lower against the U.S. dollar, with EUR/USD shedding 0.36% to hit 1.4047.
Also Thursday, the U.S. was to publish its weekly report on initial jobless claims, while Federal Reserve Chairman Ben Bernanke was to speak. In addition, U.S. President Barack Obama was to make a speech to Congress to propose new employment measures.
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