British pound fell off session highs against the US dollar on Thursday, still keeping ground above the level of 1.5000, as FED Chairman Ben Bernanke outlined yesterday that the central bank may not be so close to initiate asset purchase tapering, opposing earlier expectations.
GBP/USD pair came off a session high at 1.5192, recorded at 22:50 GMT on Wednesday, the highest point since July 4th, to reach 1.5094 at 9:38 GMT today. The pair was still up by 0.56% for the day. Support was likely to be found at current session low, 1.4996, while resistance was to be met at current session high, 1.5192.
US dollar took a sharp fall against its major peers after on July 10th Federal Reserve Chairman Ben Bernanke said, that bank’s policy should remain accommodative, even after the minutes of FED’s June meeting revealed that there were debates, regarding a possible exit to the stimulus program. According to FED minutes, half of the 19 members of FOMC voted in favor of terminating monthly asset purchases by the end of this year. However, some policymakers were not convenient with this idea, because, in their view, US labor market was in need of further improvement.
Clues about situation with the labor market in the United States were to be provided with the release of the weekly report on initial jobless claims later in the trading Thursday.
Meanwhile, the sterling registered a sudden drop below the 1.5000 level last Thursday, after Bank of England gave indications that the base interest rate was likely to remain at record low levels, because economic growth might still be frail. In addition, benchmark 10-year gilts advanced for a fourth day before the Debt Management Office in the United Kingdom sells 2.5 billion GBP of gilts maturing in 2044.
“The pound’s strength is driven mostly by dollar weakness following Bernanke’s comments,” said Ian Stannard, head of European currency strategy at Morgan Stanley in London, cited by Bloomberg. “The message he tried to get across is that interest rates are going to remain low for some time.”, he also added.
The pound was almost without change against the euro, as EUR/GBP cross ticked up 0.05% to 0.8650 at 8:54 GMT.
Sterling has decreased by 0.5% during the last week, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. US dollar declined by 0.6%, while the euro added 0.6% to its value, Bloomberg imparted.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
