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Forex - GBP/USD falls as dollar brushes off dovish Fed statement

Published 06/20/2014, 12:13 PM
Updated 06/20/2014, 12:15 PM
Pound slides against dollar as bottom fishers look past Fed statement and buy nicely-priced greenbacks
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Investing.com - The pound fell against the dollar on Friday after investors looked past the Federal Reserve's monetary policy statement this week that left markets unsure as to when rate hikes may begin.

In U.S. trading on Friday, GBP/USD was trading down 0.15% at 1.7015, up from a session low of 1.7006 and off a high of 1.7061.

Cable was likely to find support at 1.6924, Wednesday's low, and resistance at 1.7063, Thursday's high.

The Federal Reserve on Wednesday left benchmark interest rates unchanged at 0.00-0.25% and cut its monthly bond-buying program to $35 billion from $45 billion in widely expected move.

The dollar weakened, however, after the U.S. central bank stopped short of offering a timetable as to when interest rates may rise.

Markets viewed the Fed's language as somewhat dovish.

"It likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored," the Fed said in its Wednesday policy statement.

Bottom fishers, however, brought the dollar back up against the pound on Friday as the U.S. economy is still on the road to recovery.

Meanwhile in the U.K., official data revealed that public-sector net borrowing rose to £11.48 billion in May from a upwardly revised £9.00 billion the previous month. Analysts had expected public sector net borrowing to rise to £12.00 billion last month.

Elsewhere, sterling was flat against the euro, with EUR/GBP unchanged at 0.7986, and up against the yen, with GBP/JPY up 0.03% at 173.77.

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