For the 24 hours to 23:00 GMT, GBP fell 0.23% against the USD and closed at 1.5839, after the BoE lowered its growth forecast for the Q4 FY2012.
Yesterday, the Bank of England (BoE), in its quarterly inflation report, lowered its growth forecast but raised its inflation outlook. The bank projected annual growth of around 2% in two years. It indicated that inflation is likely to be around 1.8% in two years’ time, slightly above August’s 1.7% forecast. Additionally, the Bank of England governor, Mervyn King stated that the UK faces an ‘unappealing combination’ of a subdued economic recovery and above-target inflation.
Moreover, Moody’s Investors Service stated that it would revisit the UK’s ‘AAA’ government debt rating and the current ‘Negative’ outlook next year amid gloomier economic prospects and rising risks from Euro-area crisis.
Meanwhile, economic data released yesterday in the UK offered a mixed picture, wherein number of people claiming unemployment benefits rose by a seasonally adjusted 10,100 in October, compared to expectations for a decline of 5,100, while the unemployment rate ticked down to 7.8% from 7.9% in September, against forecasts for an unchanged reading.
In the Asian session, at GMT0400, the pair is trading at 1.5847, with the GBP trading marginally higher from yesterday’s close.
The pair is expected to find support at 1.5822, and a fall through could take it to the next support level of 1.5797. The pair is expected to find its first resistance at 1.5886, and a rise through could take it to the next resistance level of 1.5926.
The currency pair is trading just below its 20 Hr and 50 Hr moving averages.