Forex Pros – The pound extended steep losses against the broadly stronger U.S. dollar on Thursday, amid speculation the Bank of England may be more inclined towards further monetary easing than previously believed.
GBP/USD hit 1.5973 during European afternoon trade, the pair’s lowest since April 1; the pair subsequently consolidated at 1.5991, shedding 0.49%.
Cable was likely to find short-term support at 1.5936, the low of March 28 and resistance at 1.6208, the high of May 24.
On Wednesday, the minutes of the bank’s June policy setting meeting said some members of the monetary policy committee judged that more quantitative easing may be necessary if downside risks to medium-term inflation materialized.
Policymakers voted 7 to 2 to keep rates on hold at 0.5% at the meeting.
Elsewhere, the Federal Reserve cut its cut its 2011 economic growth forecast for the U.S. to a range of 2.7% to 2.9%, down from a previous estimate of 3.1% to 3.3%. Policymakers also cut their outlook for growth in 2012 and raised estimates for unemployment.
Fed Chairman Ben Bernanke confirmed the bank was winding up its monetary easing program at the end of the month and said further easing was unlikely.
Meanwhile, the pound was higher against the euro, with EUR/GBP shedding 0.34% to hit 0.8901.
Later Thursday, the U.S. was to publish government data on initial jobless claims, as well as official data on new home sales.
ForexPros.com
