Investing.com - The pound fell to a 3-month low against the U.S. dollar on Thursday, as demand for sterling weakened ahead of the Bank of England’s rate statement and a government debt auction in Spain.
GBP/USD hit 1.5280 during early European trade, the pair’s lowest since October 6; the pair subsequently consolidated at 1.5301, retreating 0.19%.
Cable was likely to find support at 1.5270, the low of October 6 and resistance at 1.5335, the day’s high.
Investors were cautious as Spain was due to sell up to EUR5 billion euros of government bonds maturing in 2015 and 2016, one day before Italy’s Treasury planned to auction EUR4.75 billion of five-year bonds.
The yield on Spanish 10-year bonds was at 5.36%, while the yield on 10-year Italian government bonds remained just the 7% threshold seen as unsustainable, at 7.04%.
Markets were also eyeing the European Central Bank’s policy meeting later Thursday. The ECB was expected to keep rates unchanged at 1% and to reiterate that governments in the euro zone must step up efforts to tackle the region’s debt crisis.
Fitch ratings agency said on Wednesday that the ECB should ramp up its buying of troubled euro zone debt to support Italy and prevent a "cataclysmic" collapse of the euro.
Meanwhile, the BOE was not expected to announce any change to its benchmark interest rate or asset purchase program.
Sterling was also lower against the euro with EUR/GBP climbing 0.32%, to hit 0.8316.
Later in the day, the U.K. was to release data on manufacturing production as well as a monthly estimate on gross domestic product.
In the U.S., reports were to be published on retail sales and initial jobless claims.
GBP/USD hit 1.5280 during early European trade, the pair’s lowest since October 6; the pair subsequently consolidated at 1.5301, retreating 0.19%.
Cable was likely to find support at 1.5270, the low of October 6 and resistance at 1.5335, the day’s high.
Investors were cautious as Spain was due to sell up to EUR5 billion euros of government bonds maturing in 2015 and 2016, one day before Italy’s Treasury planned to auction EUR4.75 billion of five-year bonds.
The yield on Spanish 10-year bonds was at 5.36%, while the yield on 10-year Italian government bonds remained just the 7% threshold seen as unsustainable, at 7.04%.
Markets were also eyeing the European Central Bank’s policy meeting later Thursday. The ECB was expected to keep rates unchanged at 1% and to reiterate that governments in the euro zone must step up efforts to tackle the region’s debt crisis.
Fitch ratings agency said on Wednesday that the ECB should ramp up its buying of troubled euro zone debt to support Italy and prevent a "cataclysmic" collapse of the euro.
Meanwhile, the BOE was not expected to announce any change to its benchmark interest rate or asset purchase program.
Sterling was also lower against the euro with EUR/GBP climbing 0.32%, to hit 0.8316.
Later in the day, the U.K. was to release data on manufacturing production as well as a monthly estimate on gross domestic product.
In the U.S., reports were to be published on retail sales and initial jobless claims.