Forexpros – The pound inched lower against the U.S. dollar on Wednesday, ahead of U.K. data on manufacturing activity, while investors anticipated the outcome of central bank meetings in the U.S. and the euro zone this week.
GBP/USD hit 1.5656 during European morning trade, the session low; the pair subsequently consolidated at 1.5667, dipping 0.06%.
Cable was likely to find support at 1.5624, Tuesday’s low and resistance at 1.5749, Monday’s high.
Sentiment remained subdued amid expectations for Federal Reserve and the European Central Bank to ease monetary policy this week, in an attempt to spur economic growth in the U.S. and stem the long running debt crisis in the euro zone.
Market participants were eyeing the outcome of the Fed’s policy setting meeting on Wednesday, amid speculation over whether the U.S. central bank will indicate if further quantitative easing measures are imminent.
Investors were also looking ahead to Thursday’s ECB meeting amid growing concerns that the central bank will disappoint expectations for bold steps to counter the debt crisis in the euro zone.
Expectations have been mounting that the ECB will announce measures to lower Spanish and Italian borrowing costs after the bank’s head Mario Draghi pledged last week to do whatever is necessary to preserve the euro.
In the U.K., a report showed that house prices fell at the fastest annual rate in almost three years in July, adding to concerns over economic weakness.
Mortgage lender Nationwide said house prices fell 0.7% in July and were down 2.6% year-over-year, the biggest annual decline since August 2009.
The Bank of England was to hold its monthly rate setting meeting on Thursday, but was not widely expected to announce any change to existing monetary policy.
Sterling was slightly lower against the euro, with EUR/GBP easing up 0.13% to 0.7858.
Later Wednesday, the U.K. was to produce data on manufacturing sector activity. Meanwhile, the U.S. was to release data on non-farm employment change, while the Institute for Supply Management was to produce a report on U.S. manufacturing activity.
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