Investing.com – The pound pared gains against the U.S. dollar on Thursday, re-approaching a three-week low as concerns that the euro zone’s debt crisis could spread to the region’s banking sector weighed on sentiment ahead of a speech in parliament from U.K. Chancellor George Osborne.
GBP/USD pulled back from 1.6206, the daily high, to hit 1.6141 during European afternoon trade, still up 0.04% on the day.
Cable was likely to find support at 1.6039, the low of July 19 and resistance at 1.6334, Wednesday’s high.
European equities were significantly off their earlier highs, as fears over the region’s ongoing sovereign debt crisis continued to weigh on sentiment.
Shares in major French lenders erased gains from earlier in the session, to trade sharply lower. Societe Generale, which at one point saw shares trade 5.5% higher, tumbled 8%.
Rivals BNP Paribas saw shares drop 5.5%, amid speculation the lender was facing another EUR496 million of losses on Greece, while Credit Agricole surrendered a 6.5% gain to trade down 2.1%.
The losses come after rumors of an imminent French sovereign debt downgrade rattled investors’ confidence on Wednesday, leading to sharp losses in Europe and on Wall Street.
Meanwhile, U.K. Chancellor of the Exchequer George Osborne was to address parliament later Thursday, following the recent turmoil in financial markets and the Bank of England's downgrade of its U.K. growth forecast on Wednesday.
In its quarterly inflation report, the Bank of England cut its year-end growth forecast to just below 2.0% from 2.5% at the time of its May inflation report, saying that economic growth was likely to remain "sluggish" in the near term.
The BoE also said that it expected inflation to ease towards its 2% annual target by the end of 2012 and dip slightly below target in 2013.
The statement added to the view that the central bank would keep rates at a record low for a longer period, while also reaffirming expectations the bank could introduce further easing measures if the economy deteriorated.
Elsewhere, the pound was also up against the euro, with EUR/GBP shedding 0.27% to hit 0.8764.
Later in the day, the U.S. was to release official data on its trade balance, as well as a government report on initial jobless claims and natural gas stockpiles.
GBP/USD pulled back from 1.6206, the daily high, to hit 1.6141 during European afternoon trade, still up 0.04% on the day.
Cable was likely to find support at 1.6039, the low of July 19 and resistance at 1.6334, Wednesday’s high.
European equities were significantly off their earlier highs, as fears over the region’s ongoing sovereign debt crisis continued to weigh on sentiment.
Shares in major French lenders erased gains from earlier in the session, to trade sharply lower. Societe Generale, which at one point saw shares trade 5.5% higher, tumbled 8%.
Rivals BNP Paribas saw shares drop 5.5%, amid speculation the lender was facing another EUR496 million of losses on Greece, while Credit Agricole surrendered a 6.5% gain to trade down 2.1%.
The losses come after rumors of an imminent French sovereign debt downgrade rattled investors’ confidence on Wednesday, leading to sharp losses in Europe and on Wall Street.
Meanwhile, U.K. Chancellor of the Exchequer George Osborne was to address parliament later Thursday, following the recent turmoil in financial markets and the Bank of England's downgrade of its U.K. growth forecast on Wednesday.
In its quarterly inflation report, the Bank of England cut its year-end growth forecast to just below 2.0% from 2.5% at the time of its May inflation report, saying that economic growth was likely to remain "sluggish" in the near term.
The BoE also said that it expected inflation to ease towards its 2% annual target by the end of 2012 and dip slightly below target in 2013.
The statement added to the view that the central bank would keep rates at a record low for a longer period, while also reaffirming expectations the bank could introduce further easing measures if the economy deteriorated.
Elsewhere, the pound was also up against the euro, with EUR/GBP shedding 0.27% to hit 0.8764.
Later in the day, the U.S. was to release official data on its trade balance, as well as a government report on initial jobless claims and natural gas stockpiles.