British pound traded at lower levels against the US dollar on Thursday ahead of statements by the Bank of England and the European Central Bank, regarding the course of their monetary policies.
GBP/USD hit a session low at 1.5236 at 7:01 GMT, after which consolidation followed at 1.5250. Support for the pair was expected at July 1st low, 1.5182, while resistance was to be encountered at June 27th high, 1.5345.
Bank of England (BoE) was expected to leave base interest rate and monetary stimulus intact at its meeting on Thursday, the first one under the leadership of new Governor Mark Carney. “We think we will get a statement which breaks with tradition,” said Paul Robson, a senior currency strategist at Royal Bank of Scotland Group Plc in London, cited by Bloomberg. “We’re not expecting sterling to react poorly to the fact that we get a statement. The data point to the economy growing, so it’s quite hard for them to justify anything too dovish at this point.”, he added.
On Wednesday Markit in cooperation with the Chartered Institute of Purchasing and Supply (CIPS) reported, that Services PMI in the United Kingdom registered a jump to 27-month high at 56.9 in June, far above expectations of a reading of 54.5, while in May the reading showed 54.9. Additionally, on Monday manufacturing PMI in the UK stated an activity expansion in the sector at the highest rate in over two years in the month of June. These results bolstered optimism over the countrys GDP during the second quarter of 2013 and made unlikely the prospect of additional stimulus measures by BoE.
In the mean time, today it was reported that Halifax Bank of Scotland (HBOS) House Prices indicator in UK registered a 3.7% increase in June on annual basis, slightly above initial estimates, which pointed a jump by 3.6%, while during the preceding month prices rose by 2.6%. In monthly terms, the indicator rose by 0.6% in June, while in May it was higher by 0.4%. The average price per home rose to 167 894 GBP in June. Overall results in June showed the largest jump since August 2010, giving another confirmation of further recovery in the housing sector.
Market players began focusing on the US non-farm payrolls report due on Friday, in search for clues about the future of FEDs stimulus policy. A report on Wednesday showed that the private sector in the United States added 188 000 job positions in June, more than expectations of an increase by 160 000.
Pound edged lower against the euro, as EUR/GBP cross moved up by 0.08% to reach 0.8519. Later today the European Central Bank was expected to leave the base interest rate intact, following its policy meeting and to announce that an exit from the current loose monetary policy remains at distance.
British pound has risen by 3.9% in the past three months, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-market nations. The euro has advanced 4.3%, while the US dollar increased in value by 3.8%, Bloomberg imparted.
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