Forex Pros – The pound erased early gains against the U.S. dollar on Monday, slipping to a three-week low as a recent flurry of softer-than-expected U.K. data added to the view that the Bank of England is unlikely to raise rates for some time to come.
GBP/USD hit 1.6344 during European morning trade, the pair’s lowest since April 20; the pair subsequently consolidated at 1.6362, slipping 0.06%.
Cable was likely to find support at 1.6306, the low of April 20 and resistance at 1.6543, the high of May 5.
Earlier in the day, the Confederation of British Industry cut its U.K. growth forecasts for the next two years. The CBI said it now expected the economy to grow by 1.7% this year and a further 2.2% in 2012. The CBI has previously estimated growth of 1.8% this year and 2.3% in 2012.
The BoE was to publish its quarterly growth forecast later in the week.
Also Monday, mortgage lender Halifax said U.K. house prices fell 1.4% in April, confounding expectations for a 0.1% gain and leaving average prices in the three months to April 3.7% lower than a year earlier.
Meanwhile, the pound was down against the euro, with EUR/GBP climbing 0.52% to hit 0.8793.
Last week, the BoE left interest rates on hold at 0.5% amid concerns over the strength of the economic recovery in the U.K.
ForexPros.com
