The cable was trading at eight month lows against the dollar on Wednesday after the minutes of the Bank of England’s February meeting showed that policymakers were divided over whether to implement additional easing measures. GBP/USD hit 1.5283 during European afternoon trade, the pair’s lowest since June 1; the pair subsequently consolidated at 1.5307, shedding 0.77%. Cable is likely to find near-term support at 1.5267, the low of June 1 and resistance at 1.5450, the session high. BoE policymakers were split six to three on whether to increase the bank’s quantitative easing program to GBP400 billion from GBP375 billion, with BoE Governor Mervyn King voting in favor of an increase. At a press conference following last week’s quarterly inflation report Governor King did not out rule the possibility of further easing measures, but did say that the benefit they provided to the economy was diminishing. The minutes showed that policymakers voted unanimously to keep interest rates unchanged at a record low 0.5%. Meanwhile, official data showed that the number of people claiming unemployment benefits in the U.K. declined more-than-expected in January. The Office for National Statistics said that the claimant count fell by a seasonally adjusted 12,500 in January, compared to expectations for a decline of 5,000 people. The rate of unemployment ticked up to 7.8% from 7.7% in December. Analysts had expected the jobless rate to remain unchanged. Cable was trading close to 15-month lows against the euro, with EUR/GBP up 0.66% to 0.8730. Investors were looking ahead to the release of minutes from the Federal Reserve’s January meeting later in the session, amid speculation over how long the U.S. central bank is likely to pursue its quantitative easing program.
EasyForexNews Research Team