Investing.com - The pound extended losses against the U.S. dollar on Wednesday, after the minutes of the Bank of England’s most recent meeting showed that policymakers looked at an even larger increase in easing measures than the bank implemented.
GBP/USD hit 1.5672 during European afternoon trade, the pair’s lowest since February 16; the pair subsequently consolidated at 1.5673, falling 0.67%.
Cable was likely to find short-term support at 1.5644, the low of February 14 and resistance at 1.5813, the session high.
Sterling weakened broadly after the minutes of the BoE’s February meeting showed that two policymakers supported a GBP75 billion increase, while the remainder of the monetary policy committee voted in favor of a GBP50 billion increase in the bank's asset purchase program.
The majority of policymakers believed that an increase of more than GBP50 billion "risked sending a signal that the Committee thought the economic situation was weaker than it was."
The central bank’s February inflation report predicted that growth would improve later in the year and inflation would drop close to 2% in two years but said that the threat posed by the ongoing debt crisis in the euro zone remained a major downside risk to growth.
Market sentiment was also hit by ongoing uncertainty over whether a second EUR130 billion bailout for Greece will be enough to resolve the country’s fiscal woes as the economic situation there continues to deteriorate.
The pound was trading close to a two-month trough against the euro, with EUR/GBP advancing 0.71% to hit 0.8445.
Earlier Wednesday, preliminary data showed that manufacturing activity in the euro zone improved less-than-expected in February, remaining in contraction territory for the seventh consecutive month, while service sector activity contracted unexpectedly.
Data from Germany and France showed modest growth in business activity, albeit at a slower pace than in January, but activity in peripheral euro zone nation’s showed a steep decline this month.
A separate report showed that new industrial orders across the euro zone increased by 1.8% in December, erasing the previous month’s 1.1% drop.
GBP/USD hit 1.5672 during European afternoon trade, the pair’s lowest since February 16; the pair subsequently consolidated at 1.5673, falling 0.67%.
Cable was likely to find short-term support at 1.5644, the low of February 14 and resistance at 1.5813, the session high.
Sterling weakened broadly after the minutes of the BoE’s February meeting showed that two policymakers supported a GBP75 billion increase, while the remainder of the monetary policy committee voted in favor of a GBP50 billion increase in the bank's asset purchase program.
The majority of policymakers believed that an increase of more than GBP50 billion "risked sending a signal that the Committee thought the economic situation was weaker than it was."
The central bank’s February inflation report predicted that growth would improve later in the year and inflation would drop close to 2% in two years but said that the threat posed by the ongoing debt crisis in the euro zone remained a major downside risk to growth.
Market sentiment was also hit by ongoing uncertainty over whether a second EUR130 billion bailout for Greece will be enough to resolve the country’s fiscal woes as the economic situation there continues to deteriorate.
The pound was trading close to a two-month trough against the euro, with EUR/GBP advancing 0.71% to hit 0.8445.
Earlier Wednesday, preliminary data showed that manufacturing activity in the euro zone improved less-than-expected in February, remaining in contraction territory for the seventh consecutive month, while service sector activity contracted unexpectedly.
Data from Germany and France showed modest growth in business activity, albeit at a slower pace than in January, but activity in peripheral euro zone nation’s showed a steep decline this month.
A separate report showed that new industrial orders across the euro zone increased by 1.8% in December, erasing the previous month’s 1.1% drop.