The sterling retreated against the US dollar on Tuesday, reaching its lowest point today, as sentiment was dominated by continuing uncertainty over the course of Federal Reserves monetary policy.
GBP/USD fell to a session low at 1.5954 at 12:19 GMT, after which consolidation followed at 1.5967, still losing 0.48% for the day. Support for the pair was likely to be found at September 18th low, 1.5891, while resistance was to be encountered at the current session high, 1.6045.
Earlier today the British Bankers Association reported that the number of mortgage approvals in the United Kingdom rose in August compared to July. The number of new mortgages reached 38 228 in August, or the largest number since December 2009, in comparison with 37 428 a month ago. One of Bank of Englands initiatives “Funding for Lending”, which provides low interest rates on loans, has facilitated the increase in housing market activity during 2013. New approved mortgages were 25.6% more in August 2013 compared to August 2012.
In addition, one of the nine members of Bank of Englands Monetary Policy Committee, David Miles said that British economy seemed to be recovering at a steady pace, but still, a quite strong rate of economic growth would be needed, if unemployment rate in the country was to be considerably decreased.
Meanwhile, sentiment was strongly influenced by Fed speakers. New York Federal Reserve President William Dudley said that it was still possible that the central bank may consider a reduction of scale of stimulus by the end of the year. He joined Fed Chairman Bernankes view that US economy has so far been developing in line with expectations and if this tendency continued, it was possible that the monthly pace of purchases be reduced from the current 85-billion-USD rate by the end of 2013 and the program completely exited in 2014. This statement came almost one week after the most recent Fed meeting on policy, at which no changes in monetary stimulus has been introduced. The next meeting of the Federal Reserve Bank is scheduled for October 30th.
Elsewhere, the pound was lower against the euro, with EUR/GBP cross advancing 0.37% to trade at 0.8443 at 13:35 GMT. GBP/JPY pair was losing 0.54% on a daily basis to trade at 157.76 at 13:36 GMT.
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