Investing.com – The pound remained up against the U.S. dollar on Thursday, but was off the daily high after European Central Bank President Mario Draghi said tensions in financial markets could slow growth in the region, weighing on risk appetite.
GBP/USD hit 1.6040 during U.S. morning trade, the session high; the pair subsequently consolidated at 1.6003, gaining 0.34%.
Cable was likely to find support at 1.5753, the low of October 21 and resistance at 1.6047, Wednesday’s high.
Earlier in the day, the ECB cut its benchmark interest rate from 1.5% to 1.25%, as the region’s escalating debt crisis overshadowed concerns over persistently high inflation.
Speaking at the bank’s post policy meeting press conference, Mr. Draghi said ongoing tensions in financial markets could slow the pace of growth in the euro zone and said the region’s economy continued to be “subject to particularly high uncertainty and intensified downside risks.”
"What we are observing now is ... slow growth heading towards a mild recession by year end," he said.
Meanwhile, in Greece, Prime Minister George Papandreou’s government was on the brink of collapse after several ministers said they did not support his plan for a referendum on the bailout agreement for the country, agreed on last week.
Speaking through a spokesman, Mr. Papandreou said he was open to talks with the main opposition party to discuss demands for a caretaker government, possibly eliminating the need for the vote.
In the U.S., the Institute of Supply Management said earlier that its non-manufacturing purchasing managers' index fell unexpectedly in October, ticking down to 52.9 after a reading at 53.0 the previous month.
Analysts had expected the index to rise to 53.7 in October.
In a separate report, the U.S. Department of Labor said that initial jobless claims rose less-than-expected last week.
The pound was also higher against the euro, with EUR/GBP shedding 0.22% to hit 0.8600.
Also Thursday, leaders from the G-20 group of nations were meeting in Cannes to discuss a range of issues, including the implications of a Greek default or possible euro zone exit.
GBP/USD hit 1.6040 during U.S. morning trade, the session high; the pair subsequently consolidated at 1.6003, gaining 0.34%.
Cable was likely to find support at 1.5753, the low of October 21 and resistance at 1.6047, Wednesday’s high.
Earlier in the day, the ECB cut its benchmark interest rate from 1.5% to 1.25%, as the region’s escalating debt crisis overshadowed concerns over persistently high inflation.
Speaking at the bank’s post policy meeting press conference, Mr. Draghi said ongoing tensions in financial markets could slow the pace of growth in the euro zone and said the region’s economy continued to be “subject to particularly high uncertainty and intensified downside risks.”
"What we are observing now is ... slow growth heading towards a mild recession by year end," he said.
Meanwhile, in Greece, Prime Minister George Papandreou’s government was on the brink of collapse after several ministers said they did not support his plan for a referendum on the bailout agreement for the country, agreed on last week.
Speaking through a spokesman, Mr. Papandreou said he was open to talks with the main opposition party to discuss demands for a caretaker government, possibly eliminating the need for the vote.
In the U.S., the Institute of Supply Management said earlier that its non-manufacturing purchasing managers' index fell unexpectedly in October, ticking down to 52.9 after a reading at 53.0 the previous month.
Analysts had expected the index to rise to 53.7 in October.
In a separate report, the U.S. Department of Labor said that initial jobless claims rose less-than-expected last week.
The pound was also higher against the euro, with EUR/GBP shedding 0.22% to hit 0.8600.
Also Thursday, leaders from the G-20 group of nations were meeting in Cannes to discuss a range of issues, including the implications of a Greek default or possible euro zone exit.