Investing.com - The pound fell to a one-week low against the U.S. dollar on Wednesday, as markets trimmed back expectations for a third round of monetary stimulus from the Federal Reserve, but the pound remained supported by robust U.K. services sector data.
GBP/USD hit 1.5860 during European afternoon trade, the pair’s lowest since March 28; the pair subsequently consolidated at 1.5872, shedding 0.25%.
Cable was likely to find support at 1.5800, the low of March 26 and resistance at 1.5957, the high of March 29.
The dollar strengthened broadly after Tuesday’s minutes of the Fed’s March meeting showed that policymakers will refrain from launching a third round of quantitative easing unless the rate of U.S. growth falters or inflation drops below the central bank’s 2% targeted rate.
Meanwhile, concerns that Spain may be the next euro zone member to require a bailout mounted, following a poorly received auction of government debt earlier.
Spain’s Treasury auctioned EUR2.59 billon of government bonds, short of the maximum targeted amount of EUR3.5 billion, in the country’s first debt auction since last week’s austerity budget. Following the auction, the yield on Spanish 10-year bonds climbed to 5.7%, up from 5.5% before the sale.
Risk appetite was also hit by concerns over the outlook for growth in the euro zone following a flurry of weak economic data.
But the pound remained supported by a report showing that the U.K. service sector expanded more-than-forecast in March, adding to hopes that the economic recovery is gaining traction.
The U.K. service PMI rose to 55.3 last month, its highest level since January and up from a reading of 53.8 in February. Economists had forecast a decline to 53.5 last month.
The pound was higher against the euro, with EUR/GBP shedding 0.37% to hit 0.8284.
Later in the day, the U.S. was to publish a report non-farm employment change, as well as data from the Institute of Supply Management on service sector growth. In addition, U.S. Treasury Secretary Timothy Geithner was due to speak.
GBP/USD hit 1.5860 during European afternoon trade, the pair’s lowest since March 28; the pair subsequently consolidated at 1.5872, shedding 0.25%.
Cable was likely to find support at 1.5800, the low of March 26 and resistance at 1.5957, the high of March 29.
The dollar strengthened broadly after Tuesday’s minutes of the Fed’s March meeting showed that policymakers will refrain from launching a third round of quantitative easing unless the rate of U.S. growth falters or inflation drops below the central bank’s 2% targeted rate.
Meanwhile, concerns that Spain may be the next euro zone member to require a bailout mounted, following a poorly received auction of government debt earlier.
Spain’s Treasury auctioned EUR2.59 billon of government bonds, short of the maximum targeted amount of EUR3.5 billion, in the country’s first debt auction since last week’s austerity budget. Following the auction, the yield on Spanish 10-year bonds climbed to 5.7%, up from 5.5% before the sale.
Risk appetite was also hit by concerns over the outlook for growth in the euro zone following a flurry of weak economic data.
But the pound remained supported by a report showing that the U.K. service sector expanded more-than-forecast in March, adding to hopes that the economic recovery is gaining traction.
The U.K. service PMI rose to 55.3 last month, its highest level since January and up from a reading of 53.8 in February. Economists had forecast a decline to 53.5 last month.
The pound was higher against the euro, with EUR/GBP shedding 0.37% to hit 0.8284.
Later in the day, the U.S. was to publish a report non-farm employment change, as well as data from the Institute of Supply Management on service sector growth. In addition, U.S. Treasury Secretary Timothy Geithner was due to speak.