Forex – GBP/USD trims losses, Fed minutes ahead

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Pound trims losses vs. dollar ahead of Fed minutesPound trims losses vs. dollar ahead of Fed minutes

Investing.com – The pound trimmed losses and held steady against the U.S. dollar on Wednesday, as investors awaited the Federal Reserve’s meeting minutes due later in the day.

GBP/USD pulled away from 1.7094, the session low, to hit 1.7121 during U.S. morning trade, still down 0.05%.

Cable was likely to find support at 1.7009, the low of June 30 and resistance at 1.7108, the high of July 7.

The pound fell to one-week lows against the dollar before recovering slightly on Tuesday, as data showing an unexpected decline in U.K. manufacturing and industrial output indicated that the economic recovery may not be as strong as hoped.

The reports prompted investors to sell sterling to lock in gains after the currency rose to six-year highs against the greenback late last week.

The pound has strengthened broadly this year amid expectations that the deepening economic recovery in the U.K. will see the Bank of England raise interest rates before the end of 2014.

Meanwhile, the dollar remained under pressure amid concerns that recent U.S. data showing that the labor market is continuing to strengthen will not be enough to prompt the Fed to bring forward its timetable for raising interest rates.

Last week, data showed that the U.S. economy added a larger-than-forecast 288,000 jobs last month, while the unemployment rate ticked down to 6.1%, the lowest in almost six years.

Markets were looking the minutes of the Fed’s June meeting, due for publication later in the trading day, for further indications on its monetary policy stance. The Fed was expected to stick to its dovish stance amid concerns over ongoing slow growth in inflation and wages.

Sterling was lower against the euro, with EUR/GBP edging up 0.18% to 0.7959.



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