Forexpros – The pound was lower against the U.S. dollar on Wednesday, pulling away from a 12-week high amid concerns over the prospect of more monetary easing from the Bank of England after its policy setting meeting on Thursday.
GBP/USD pulled back from 1.5929, the pair’s highest since November 15, to hit 1.5805 during U.S. morning trade, shedding 0.58%.
Cable was likely to find support at 1.5749, the low of February 3 and resistance at 1.5928, the session high.
Hopes that a bailout deal for Greece will prevent a default were outweighed by the prospect of further easing by the BoE, amid expectations that policymakers will implement a further GBP50 billion of quantitative easing on Thursday, in order to shore up growth in the faltering U.K. economy.
In Greece, talks between Prime Minister Lucas Papademos and the leaders of Greece’s three political parties got underway earlier. The talks are aimed at agreeing on new austerity measures being demanded by international creditors in return for a EUR130 billion aid package.
The deeply unpopular measures include billions of euros in government spending reductions, as well as cuts to pensions and wages.
Athens is also in talks with private-sector creditors over a planned EUR100 billion debt swap deal, which is also a precondition for the new aid package.
European Union officials have said a final agreement the bailout much be approved by February 15, in order to avert a default when a EUR14.5 billion bond repayment comes due on March 20.
The pound was also lower against the euro, with EUR/GBP rising 0.44% to hit 0.8378.
On Tuesday, Federal Reserve Chairman Ben Bernanke indicated that the central bank would keep borrowing costs close to zero for another two years, despite data last week showing the U.S. unemployment rate unexpectedly fell to a three-year low.
In testimony to the Senate Budget Committee in Washington, Bernanke said the decline in the jobless rate understated weakness in the labor market.
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