Investing.com – The pound extended losses against the U.S. dollar on Thursday, falling to an eight-and-a-half month low after the Federal Reserve warned of significant weakness in the U.S. economy, prompting investors to dump riskier assets.
GBP/USD hit 1.5398 during European afternoon trade, the pair’s lowest since January 7; the pair subsequently consolidated at 1.5419, shedding 0.50%.
Cable was likely to find support at 1.5349, the low of December 29 and resistance at 1.5518, the day’s high.
Risk appetite was hit after the Fed warned of “significant downside risks” facing the U.S. economy on Wednesday and announced fresh measures to boost growth.
The central bank unveiled a plan to trade short-term bonds for long-term ones, in an attempt to boost the economy by pushing down long-term interest rates, a move dubbed “Operation Twist.”
The announcement came after the minutes of the Bank of England’s September policy meeting indicated that the bank is leaning towards more monetary easing, possibly as early as next month.
Elsewhere, the pound was higher against the euro, with EUR/GBP shedding 0.30% to hit 0.8730.
Earlier in the day, data showed that German manufacturing output fell to a 24-month low in September, while manufacturing activity in the 17-nation single currency bloc slumped to the lowest since August 2009.
A separate report showed that euro zone factory orders fell more-than-expected in July.
GBP/USD hit 1.5398 during European afternoon trade, the pair’s lowest since January 7; the pair subsequently consolidated at 1.5419, shedding 0.50%.
Cable was likely to find support at 1.5349, the low of December 29 and resistance at 1.5518, the day’s high.
Risk appetite was hit after the Fed warned of “significant downside risks” facing the U.S. economy on Wednesday and announced fresh measures to boost growth.
The central bank unveiled a plan to trade short-term bonds for long-term ones, in an attempt to boost the economy by pushing down long-term interest rates, a move dubbed “Operation Twist.”
The announcement came after the minutes of the Bank of England’s September policy meeting indicated that the bank is leaning towards more monetary easing, possibly as early as next month.
Elsewhere, the pound was higher against the euro, with EUR/GBP shedding 0.30% to hit 0.8730.
Earlier in the day, data showed that German manufacturing output fell to a 24-month low in September, while manufacturing activity in the 17-nation single currency bloc slumped to the lowest since August 2009.
A separate report showed that euro zone factory orders fell more-than-expected in July.