GBP/USD on lower levels, eyes on US retail sales

British pound slid to lower levels against the US dollar on Monday, as the greenback was supported by renewed expectations of US Federal Reserve Bank tapering its Quantitative Easing later in the year.

GBP/USD fell to a session low at 1.5039 at 8:44 GMT, the lowest point since July 11th, after which consolidation followed at 1.5049. Support was likely to be found at July 11th low, 1.4996, while resistance was to be encountered at current session high, 1.5129.

US dollar received support due to renewed expectations that FED will embark on a scale back of its asset purchases later in the year, while at the same time other central banks worldwide could preserve their current course of loose monetary policy in the foreseeable future. US Retail sales report, scheduled for release later on Monday, could provide guidance, regarding the monetary policy of the Federal Reserve. Preliminary estimates showed an increase by 0.7% in June, compared to May.

Meanwhile, at its July meeting Bank of England gave indications that the base interest rate could remain at current record low level, because of the frail economic growth. Bank of England is expected to publish the minutes of its most recent meeting on Wednesday, which will reveal how policymakers voted at new Governor Mark Carney’s first meeting.

Additionally, UK economy could expand by 1.1% this year, compared with an April forecast of 0.6%, the Ernst & Young Item Club said in a report, scheduled for publishing on Tuesday. Economic growth will be as high as 2.2% during 2014 and 2.6% during 2015, according to this report, Bloomberg imparted.

Last but not least, earlier on Monday it was reported that house prices in the United Kingdom rose for the seventh consecutive month in July, reaching record highs. Rightmove Plc. said that houses were twice as expensive as forecasts. Ask prices of houses were higher by 0.3%, as the average price during July was 253 658 GBP. In terms of the whole 2013, estimates were revised up to a 4% increase in prices from 2% previously. In London house prices remained almost unchanged at the record 515 379 GBP.

Elsewhere, the pound traded steadily against the euro, as EUR/GBP ticked up by 0.02% to reach 0.8655 at 9:08 GMT.

Sterling has declined by 2.1% this year, according to Bloomberg Correlation-Weighted Indexes, which track 10 developed-nation currencies. The dollar rose by 6.2%, while the euro advanced 5%.