On Thursday the pound dropped to one-week lows versus its US peer, as downbeat U.K. trade balance data weighed on the local currency and as investors eyed
the Bank of England's policy statement due later in the day.
GBP/USD hit 1.4764 during European morning trade, the pair's lowest since April 1; the pair subsequently consolidated at 1.4784, declining 0.56%. Cable was likely to find support at 1.4685, the low of March 19 and resistance at 1.4974, Wednesday's high.
The U.K. Office for National Statistics reported that the country's trade deficit increased to £10.34 billion in February from £9.17 billion in January, whose figure was revised from a previously estimated deficit of £8.41 billion. Economists had expected the trade deficit to hit £9.00 billion in February.
Earlier today, industry figures indicated that U.K. house prices rose 0.4% last month, exceeding expectations for a 0.2% gain. February's change in house prices was revised to a 0.4% fall from a previously estimated 0.3% downtick.
Later Thursday, the BoE was expected to leave its benchmark interest rate and asset purchase facility program on hold.
The greenback was meanwhile supported after New York Federal
Reserve President William Dudley said on Wednesday that the timing of a
rate hike depends on economic data and added that a rate hike in June
could still be possible if the labor market indicated strong recovery.
Fed Governor Jerome Powell also said that the move was possible policy despite current low levels of inflation, adding the central bank could act in June if economic data over the next two months showed that the recovery remained on track.
As Wednesday’s minutes of the Fed’s March meeting showed, several representatives of the Fed believe the economic outlook is likely to warrant an interest rate hike in June.
Sterling was lower against the euro, with EUR/GBP rising 0.31% to 0.7273.
The Institute of Supply Management is to release data on U.S. service sector activity later in the day.
