Investing.com - The pound surged against the dollar on Wednesday after U.K. unemployment data beat expectations, while a Fed decision to taper its monthly bond-buying program by USD10 billion weakened the dollar due to the dovish language associated with the move.
In U.S. trading on Wednesday, GBP/USD was trading at 1.6432, up 1.03%, up from a session low of 1.6262 and off from a high of 1.6438.
Cable was likely to find support at 1.6220, Tuesday's low, and resistance at 1.6466, the high from Dec. 10.
The pound shot up after data revealed that the U.K. unemployment rate unexpectedly fell to a four-and-a-half year low of 7.4% in the three months to October, fueling hopes that the Bank of England will raise interest rates ahead of other central banks.
Analysts were expecting a 7.6% reading.
Meanwhile in the U.S., the Federal Reserve left its key benchmark lending target, the fed funds rate, unchanged at 0.0-0.25% but said it was trimming its USD85 billion monthly asset-purchasing program by USD10 billion.
Fed asset purchases weaken the dollar by driving down interest rate, and talk of their dismantling can strengthen the greenback.
Relief buying sent stocks and higher-yielding currencies rising and the dollar falling in wake of the Fed's announcement.
The dollar also came under pressure after the Fed said policy would remain accommodative until the U.S. unemployment rate dips below 6.5% and added it could beef up its stimulus program anew should recovery falter.
The pound, meanwhile, was up against the euro and up against the yen, with EUR/GBP down 0.99% at 0.8382 and GBP/JPY up 1.74% at 169.92.
On Thursday, the U.S. is to publish data on existing home sales, manufacturing activity in the Philadelphia region and initial jobless claims.
The U.K. is to produce report on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
In U.S. trading on Wednesday, GBP/USD was trading at 1.6432, up 1.03%, up from a session low of 1.6262 and off from a high of 1.6438.
Cable was likely to find support at 1.6220, Tuesday's low, and resistance at 1.6466, the high from Dec. 10.
The pound shot up after data revealed that the U.K. unemployment rate unexpectedly fell to a four-and-a-half year low of 7.4% in the three months to October, fueling hopes that the Bank of England will raise interest rates ahead of other central banks.
Analysts were expecting a 7.6% reading.
Meanwhile in the U.S., the Federal Reserve left its key benchmark lending target, the fed funds rate, unchanged at 0.0-0.25% but said it was trimming its USD85 billion monthly asset-purchasing program by USD10 billion.
Fed asset purchases weaken the dollar by driving down interest rate, and talk of their dismantling can strengthen the greenback.
Relief buying sent stocks and higher-yielding currencies rising and the dollar falling in wake of the Fed's announcement.
The dollar also came under pressure after the Fed said policy would remain accommodative until the U.S. unemployment rate dips below 6.5% and added it could beef up its stimulus program anew should recovery falter.
The pound, meanwhile, was up against the euro and up against the yen, with EUR/GBP down 0.99% at 0.8382 and GBP/JPY up 1.74% at 169.92.
On Thursday, the U.S. is to publish data on existing home sales, manufacturing activity in the Philadelphia region and initial jobless claims.
The U.K. is to produce report on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.