Forex Pros – The pound was down against the U.S. dollar on Thursday, after the Bank of England’s inflation report along with weak employment data dampened expectations that the central bank could start raising rates in May.
GBP/USD hit 1.6078 during European morning trade, the daily low; the pair subsequently consolidated at 1.6077, shedding 0.1%.
Cable was likely to find support at 1.5986, Wednesday’s low and resistance at 1.6185, Wednesday’s high.
On Wednesday, in its quarterly inflation report, the BOE raised its forecasts for inflation for 2011 but said economic growth would be slower, weighed by higher commodity prices and government budget cuts.
The report prompted markets to reconsider whether U.K. rates will rise as early as mid-year, while highlighting the central bank’s dilemma of balancing higher inflation and weak economic growth.
Also Wednesday, official data showed that the number of people claiming unemployment benefits in the U.K. rose unexpectedly in January.
Meanwhile, the pound was slightly higher against the euro, with EUR/GBP easing down 0.09% to hit 0.8421.
Later in the day, the U.S. was to publish official data on consumer price inflation and initial jobless claims.
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