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Forex - GBP/USD drops to 1-week lows after U.K. trade data

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Investing.com -

Investing.com - The pound dropped to one-week lows against the U.S. dollar on Thursday, after downbeat U.K. trade balance data and as investors eyed the Bank of England's policy statement due later in the trading session.

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.

In a report, the U.K. Office for National Statistics said the country's trade deficit widened 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.

Analysts had expected the trade deficit to hit £9.00 billion in February.

Earlier in the day, industry data showed 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.

Meanwhile, the dollar remained supported after New York Federal Reserve President William Dudley said 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 recovery remained strong.

Fed Governor Jerome Powell said he would be willing to start tightening policy despite current low levels of inflation, adding the Fed could act in June if economic data over the next two months showed that the recovery remained on track.

Separately, Wednesday's minutes of the Fed's March meeting showed that several officials 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.

Later in the day, the Institute of Supply Management is to release data on U.S. service sector activity.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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