GBP/USD: Pound Weighed Down By Bearish Comments By The BoE Governor

GBP/USD: Pound Weighed Down By Bearish Comments By The BoE Governor

For the 24 hours to 23:00 GMT, GBP declined marginally against the USD and closed at 1.6019.

In the UK economic news, the seasonally adjusted index of services retreated 0.5% (MoM) in September, compared to a 1.0% rise in the previous month. Separately, the UK economy expanded 1.0% sequentially in the Q3 FY2012, in line with the previous estimate and following a 0.4% decline in the Q2 FY2012. Also, Office for National Statistics reported that total business investment grew 4.5% (YoY) in Q3 FY2012, compared to a 3.1% rise registered in the previous quarter.

Later, the Bank of England (BoE) Governor, Mervyn King, stated that, as a result of the Euro-zone’s debt crisis, a “black cloud of uncertainty has weighed on confidence, household spending, bank funding costs and business investment” in the UK. He also added that the BoE’s asset purchases have not in themselves become less effective, but warned that policymakers cannot keep persuading businesses and consumers to bring forward spending.

In the Asian session, at GMT0400, the pair is trading at 1.6016, with the GBP trading marginally lower from yesterday’s close.

The pair is expected to find support at 1.5997, and a fall through could take it to the next support level of 1.5979. The pair is expected to find its first resistance at 1.6045, and a rise through could take it to the next resistance level of 1.6075