Investing.com - The pound fell to a one-week low against the U.S. dollar on Thursday, in the wake of policy setting moves by the Bank of England and the European Central Bank earlier in the day.
GBP/USD hit 1.5504 during U.S. morning trade, the daily low and the lowest since June 28; the pair subsequently consolidated at 1.5505, shedding 0.55%.
Cable was likely to find support at 1.5484, the low of June 28 and resistance at 1.5691, Wednesday’s high.
BoE policymakers voted to increase the stock of asset purchases financed by the issuance of central bank reserves by GBP50 billion to GBP375 billion, in order to shield the recession hit U.K. economy from the ongoing debt crisis in the euro zone.
The central bank said that, “The weaker outlook for U.K. output growth means that the margin of economic slack is likely to be greater and more persistent.”
The bank also left the benchmark interest rate unchanged at 0.5%, where it’s stood since March 2009, in a widely expected move.
Meanwhile, the greenback found support after positive U.S. employment data eased expectations for further monetary easing measures by the Federal Reserve.
The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending June 30 fell by 14,000 to a seasonally adjusted 374,000, compared to expectations for a decline of 3,000 to 385,000.
The previous week’s figure was revised up to 388,000 from a previously reported 386,000.
The data came after payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 176,000 in June, easily surpassing expectations for an increase of 105,000.
The previous month’s figure was revised down to a gain of 136,000 from a previously reported increase of 133,000.
A separate report showed that service sector activity in the U.S. grew at a slower rate than expected in June, but still expanded for the 30th consecutive month.
Investors had been eyeing Thursday’s U.S. data amid speculation that the Federal Reserve could implement a third round of quantitative easing to shore up the economy, which has been hit by the ongoing crisis in the euro zone.
Elsewhere, the pound was higher against the euro, with EUR/GBP slumping 0.69% to hit 0.7981.
The euro came under pressure after ECB President Draghi said that the economic outlook faces downside risks, adding that indicators for the second quarter point to weakening growth in the euro zone.
Draghi said that there was probably a "renewed weakness in economic growth" in the last three months, with "heightened uncertainty”.
Draghi also refused to speculate on the chances of a third round of Long Term Refinancing Operations, in which it would provides cheap loans to European banks in an attempt to encourage them to lend.
The comments came after the central bank cut its benchmark interest rate to a record low 0.75% in July, in a bid to bolster faltering growth in the region.
The central bank also lowered its marginal lending to 1.50% from 1.75% and the deposit facility rate to 0% from 0.25%.
GBP/USD hit 1.5504 during U.S. morning trade, the daily low and the lowest since June 28; the pair subsequently consolidated at 1.5505, shedding 0.55%.
Cable was likely to find support at 1.5484, the low of June 28 and resistance at 1.5691, Wednesday’s high.
BoE policymakers voted to increase the stock of asset purchases financed by the issuance of central bank reserves by GBP50 billion to GBP375 billion, in order to shield the recession hit U.K. economy from the ongoing debt crisis in the euro zone.
The central bank said that, “The weaker outlook for U.K. output growth means that the margin of economic slack is likely to be greater and more persistent.”
The bank also left the benchmark interest rate unchanged at 0.5%, where it’s stood since March 2009, in a widely expected move.
Meanwhile, the greenback found support after positive U.S. employment data eased expectations for further monetary easing measures by the Federal Reserve.
The U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending June 30 fell by 14,000 to a seasonally adjusted 374,000, compared to expectations for a decline of 3,000 to 385,000.
The previous week’s figure was revised up to 388,000 from a previously reported 386,000.
The data came after payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 176,000 in June, easily surpassing expectations for an increase of 105,000.
The previous month’s figure was revised down to a gain of 136,000 from a previously reported increase of 133,000.
A separate report showed that service sector activity in the U.S. grew at a slower rate than expected in June, but still expanded for the 30th consecutive month.
Investors had been eyeing Thursday’s U.S. data amid speculation that the Federal Reserve could implement a third round of quantitative easing to shore up the economy, which has been hit by the ongoing crisis in the euro zone.
Elsewhere, the pound was higher against the euro, with EUR/GBP slumping 0.69% to hit 0.7981.
The euro came under pressure after ECB President Draghi said that the economic outlook faces downside risks, adding that indicators for the second quarter point to weakening growth in the euro zone.
Draghi said that there was probably a "renewed weakness in economic growth" in the last three months, with "heightened uncertainty”.
Draghi also refused to speculate on the chances of a third round of Long Term Refinancing Operations, in which it would provides cheap loans to European banks in an attempt to encourage them to lend.
The comments came after the central bank cut its benchmark interest rate to a record low 0.75% in July, in a bid to bolster faltering growth in the region.
The central bank also lowered its marginal lending to 1.50% from 1.75% and the deposit facility rate to 0% from 0.25%.