Forexpros – The pound was lower against the U.S. dollar on Monday, tracking losses in the euro as investors looked ahead to Thursday’s policy meetings by the European Central Bank and the Bank of England.
GBP/USD hit 1.5674 during European afternoon trade, the session low; the pair subsequently consolidated at 1.5707, shedding 0.24%.
Cable was likely to find support at 1.5665, Friday’s low and resistance at 1.5766, Friday’s high and a five-week high.
Expectations that the ECB is set to announce fresh policy measures to tackle the long running crisis in the euro zone mounted after bank head Mario Draghi pledged Thursday to do whatever is necessary to preserve the single currency.
But market sentiment remained fragile amid concerns that the central bank could disappoint market expectations.
Meanwhile, concerns over the outlook for the euro zone persisted after official data showed that Spain’s economy contracted 0.4% in the three month to June, extending the recession into a third quarter.
A separate report showed that the European Commission’s index of economic sentiment across the euro area dropped to a 34 month low in July, with confidence in Spain, Germany and France all dropping sharply.
In the U.K., official data showed that mortgage approvals fell to the lowest level in 18 months in June, while a separate report showed that net lending grew at the slowest pace in 12 months in July, underlining concerns over economic weakness.
The BoE said mortgage approvals fell to 44,192 in June, down from 50,544 in May, the lowest reading since December 2010 and well below analysts’ forecast of a reading of 49,000.
The data came after data last week showed that the U.K. economy contracted significantly more-than-expected in the second quarter.
The BoE was not widely expected to announce any changes to monetary policy at its meeting on Thursday.
Investors were also looking ahead to the outcome of the Federal Reserve’s policy setting meeting on Wednesday, amid speculation over whether the bank will hint at further easing measures.
The pound was higher against the euro, with EUR/GBP shedding 0.27% to hit 0.7798.
Later Monday, U.S. Treasury Secretary Timothy Geithner was to meet with German Finance Minister Wolfgang Schaeuble and Mario Draghi to discuss the European, U.S. and global economies.
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