Forexpros – The pound trimmed losses to trade little changed against the U.S. dollar on Thursday, after the Bank of England increased its quantitative easing program by GBP50 billion and left interest rates unchanged.
GBP/USD hit a session low of 1.5555 earlier in the session, before trimming losses to trade at 1.5584 during European afternoon trade, easing down 0.04%.
Cable was likely to find support at 1.5544, the low of June 27 and resistance at 1.5691, Wednesday’s high.
BoE policymakers voted to increase the stock of asset purchases financed by the issuance of central bank reserves by GBP50 billion to GBP375 billion, in order to shield the recession hit U.K. economy from the ongoing debt crisis in the euro zone.
The central bank said that, “The weaker outlook for U.K. output growth means that the margin of economic slack is likely to be greater and more persistent.”
The decision came after data released earlier in the week showed that service sector activity in the U.K. expanded at the slowest rate in eight months in June.
Meanwhile, construction activity in the U.K. fell at the fastest rate in two-and-a-half years last month, while a separate report showed that the manufacturing sector contracted for a second successive month in June.
The bank also left the benchmark interest rate unchanged at 0.5%, where it’s stood since March 2009, in a widely expected move.
Investors now turn their attention to a monetary policy decision from the European Central Bank later in the session.
The ECB was widely expected to announce an interest rate cut to 0.75% from the current record low 1.00% to help bolster growth in the region, following a recent string of weak economic data.
The ECB rate announcement was to be followed by a press conference with central bank head Mario Draghi to outline the reasons for the monetary policy decision and discuss the economic outlook for the euro area.
Elsewhere, the pound was higher against the euro, with EUR/GBP shedding 0.17% to hit 0.8022.
Later in the day, the U.S. was to publish a report by payroll processing firm ADP on non-farm employment change, followed by government data on unemployment claims. In addition, the Institute of Supply Management was to release a report on U.S. service sector activity.
Markets were also eyeing Friday’s U.S. nonfarm payrolls report, amid speculation that the Federal Reserve could implement a third round of quantitative easing to shore up the economy, which has been hit by the ongoing crisis in the euro zone.
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