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Forex - GBP/USD hits 7-day low as BOE rate decision eyed

Published 02/10/2011, 05:03 AM
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Investing.com – The pound was down against the U.S. dollar on Thursday, ahead of the Bank of England’s interest rate announcement and after data showing that U.K. manufacturing production fell unexpectedly in December.

GBP/USD hit 1.6031 during European morning trade, the pair’s lowest since February 1; the pair subsequently consolidated at 1.606, shedding 0.24%.

Cable was likely to find support at 1.6008, the low of February 1 and resistance at 1.6123, Wednesday’s high.

The Office for National Statistics said that manufacturing output fell 0.1% in December after a 0.6% rise in November. Analysts had forecast a rise of 0.4%.

However, the wider industrial output measure rose by 0.5%, in line with expectations.

One of the main drivers of the fall in factory output was the production of bricks, cement, plaster and other "non-metallic minerals" mainly used in the construction industry, which fell at their fastest pace since 1979.

This decline was offset, however, by a 6.1% rise in electricity, gas and water output, the biggest monthly increase since May 2007.

Meanwhile, the pound was up against the euro, with EUR/GBP shedding 0.5% to hit 0.8484.

Later in the day, the U.S. was to release its key weekly report on initial jobless claims, while the BOE was to announce its benchmark interest rate.

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