The pound remained lower against the USD on Thursday, as concerns over the outlook for economic growth in the U.K. and uncertainty over Britain’s future in the European Union continued to dampen demand for sterling. GBP/USD hit 1.5757 during U.S. morning trade, the pair’s lowest since August 28; the pair subsequently consolidated at 1.5773, shedding 0.45%. Cable was likely to find support at 1.5707, the low of August 21 and resistance at 1.5852, the session high. The pound was trading close to five-month lows against the greenback after the International Monetary Fund cut Britain’s growth forecast for this year and the next on Wednesday, adding to fears over the faltering U.K. recovery. The IMF said that Britain’s economy would grow by 1% this year, 0.1% lower than in its October forecast and by 1.9% in 2014 , 0.3% less compared with October. The IMF also trimmed its 2013 forecast for global growth to 3.5% from the 3.6% it projected in October, but said the global economy would expand by 4.1% in 2014 if the euro zone recovery continued. Meanwhile, uncertainty over Britain’s future in the EU lingered after Prime Minister David Cameron pledged to hold a referendum on the issue before the end of 2017, amid growing political pressure for Britain to re-negotiate its relationship with Europe. Sterling was also lower against the euro with EUR/GBP advancing 0.80%, to hit 0.8471.
EasyForexNews Research Team