Investing.com - The pound was lower against the U.S. dollar on Wednesday, as the improving outlook for the U.S. economy saw investors trim back expectations for a third round of quantitative easing by the Federal Reserve.
GBP/USD hit 1.5650 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.5674, shedding 0.20%.
Cable was likely to find short-term support at 1.5620, Tuesday’s low and short-term resistance at 1.5758, the high of March 7.
Demand for the greenback was boosted after the Fed upgraded its outlook for the economy on Tuesday, sparking speculation that the central bank is moving away from a policy of monetary easing.
In its rate statement, the Fed said it now expects to see “moderate economic growth” after its January statement said growth would be “modest” and added that higher oil prices could place upward pressure on inflation.
The central bank also acknowledged the recent improvement in the labor market, saying it expected the unemployment rate to “decline gradually.”
However, policymakers reiterated their intention to keep the benchmark interest rate unchanged at a record low through late 2014 and warned that risks to the economic recovery still remained.
The outlook for the U.S. economic recovery was also bolstered after data on Tuesday showed that U.S. retail sales rose to a five-month high of 1.1% in February, coming after data last week showing that the U.S. economy added more jobs than forecast last month.
The pound came under pressure earlier after official data showed that the number of people claiming unemployment benefits in the U.K. rose more-than-expected in February, while the unemployment rate held steady at 8.4%, the highest level since 1995.
The U.K. Office for National Statistics said that the claimant count rose by a seasonally adjusted 7,200 in February, above expectations for an increase of 6,000.
But sterling remained supported as a recent improvement in U.K. economic data, including retail sales and housing numbers fuelled hopes that the economy is recovering.
The pound was higher against the euro, with EUR/GBP shedding 0.20% to hit 0.8313.
Also Wednesday, Eurogroup head Jean-Claude Juncker said euro zone finance ministers had formally approved the release of a second financial aid package for Greece, worth EUR130 billion.
GBP/USD hit 1.5650 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.5674, shedding 0.20%.
Cable was likely to find short-term support at 1.5620, Tuesday’s low and short-term resistance at 1.5758, the high of March 7.
Demand for the greenback was boosted after the Fed upgraded its outlook for the economy on Tuesday, sparking speculation that the central bank is moving away from a policy of monetary easing.
In its rate statement, the Fed said it now expects to see “moderate economic growth” after its January statement said growth would be “modest” and added that higher oil prices could place upward pressure on inflation.
The central bank also acknowledged the recent improvement in the labor market, saying it expected the unemployment rate to “decline gradually.”
However, policymakers reiterated their intention to keep the benchmark interest rate unchanged at a record low through late 2014 and warned that risks to the economic recovery still remained.
The outlook for the U.S. economic recovery was also bolstered after data on Tuesday showed that U.S. retail sales rose to a five-month high of 1.1% in February, coming after data last week showing that the U.S. economy added more jobs than forecast last month.
The pound came under pressure earlier after official data showed that the number of people claiming unemployment benefits in the U.K. rose more-than-expected in February, while the unemployment rate held steady at 8.4%, the highest level since 1995.
The U.K. Office for National Statistics said that the claimant count rose by a seasonally adjusted 7,200 in February, above expectations for an increase of 6,000.
But sterling remained supported as a recent improvement in U.K. economic data, including retail sales and housing numbers fuelled hopes that the economy is recovering.
The pound was higher against the euro, with EUR/GBP shedding 0.20% to hit 0.8313.
Also Wednesday, Eurogroup head Jean-Claude Juncker said euro zone finance ministers had formally approved the release of a second financial aid package for Greece, worth EUR130 billion.