Investing.com - The pound hit fresh session lows against the U.S. dollar on Wednesday, although losses were expected to remain limited amid mounting uncertainty over when the Federal Reserve will begin tapering its bond buying program.
GBP/USD hit 1.6340 during U.S. morning trade, the pair's lowest since Monday; the pair subsequently consolidated at 1.6361, retreating 0.52%.
Cable was likely to find support at 1.6350 and resistance at 1.6456, the session high.
The dollar remained under pressure amid expectations that the Fed will hold off on tapering its USD85 billion-a-month asset purchase program at its upcoming policy meeting scheduled for December 17-18, despite last week’s stronger-than-forecast U.S. nonfarm payrolls report.
The greenback shrugged off news that U.S. Congressional leaders reached an agreement on a two year budget deal. Congress will still need to reach a deal to raise the U.S. debt ceiling in February 2014 in order to avert a default.
But the pound’s losses looked likely to remain limited after a recent series of upbeat economic data reinforced the view that the economic recovery in the U.K. is gaining traction, fuelling hopes that the Bank of England may raise interest rates ahead of other central banks.
On Tuesday, the National Institute of Economic and Social Research said the U.K. economy grew by 0.8% in the three months to November, indicating that the pace of the recovery is continuing, after the economy grew by 0.8% in the third quarter.
Sterling was lower against the euro, with EUR/GBP climbing 0.62% to 0.8420.
The single currency remained supported as expectations for further monetary easing by the European Central Bank dimmed after the bank held back from fresh rate cuts at last week’s policy meeting.
The euro also strengthened after European Union finance ministers moved closer to an agreement on a European banking union on Tuesday, a measure which is seen as key in fending off a repeat of the region’s financial crisis.
GBP/USD hit 1.6340 during U.S. morning trade, the pair's lowest since Monday; the pair subsequently consolidated at 1.6361, retreating 0.52%.
Cable was likely to find support at 1.6350 and resistance at 1.6456, the session high.
The dollar remained under pressure amid expectations that the Fed will hold off on tapering its USD85 billion-a-month asset purchase program at its upcoming policy meeting scheduled for December 17-18, despite last week’s stronger-than-forecast U.S. nonfarm payrolls report.
The greenback shrugged off news that U.S. Congressional leaders reached an agreement on a two year budget deal. Congress will still need to reach a deal to raise the U.S. debt ceiling in February 2014 in order to avert a default.
But the pound’s losses looked likely to remain limited after a recent series of upbeat economic data reinforced the view that the economic recovery in the U.K. is gaining traction, fuelling hopes that the Bank of England may raise interest rates ahead of other central banks.
On Tuesday, the National Institute of Economic and Social Research said the U.K. economy grew by 0.8% in the three months to November, indicating that the pace of the recovery is continuing, after the economy grew by 0.8% in the third quarter.
Sterling was lower against the euro, with EUR/GBP climbing 0.62% to 0.8420.
The single currency remained supported as expectations for further monetary easing by the European Central Bank dimmed after the bank held back from fresh rate cuts at last week’s policy meeting.
The euro also strengthened after European Union finance ministers moved closer to an agreement on a European banking union on Tuesday, a measure which is seen as key in fending off a repeat of the region’s financial crisis.