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Forex - GBP/USD edges down to fresh 17-month lows

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Investing.com -

Investing.com - The pound edged down to fresh 17-month lows against the U.S. dollar on Wednesday, as a recent string of downbeat U.K. data continued to weigh and concerns over a potential Greek exit from the euro zone persisted.

GBP/USD hit 1.5115 during European morning trade, the pair's lowest since August 2013; the pair subsequently consolidated at 1.5124, slipping 0.17%.

Cable was likely to find support at 1.5101 and resistance at 1.5274, Tuesday's high.

The pound remained under pressure after data on Tuesday showed that the Markit/CIPS Services Purchasing Managers Index decreased to 55.8 last month from a reading of 58.6 in November. Analysts had expected the index to dip to 58.5 in December.

The report came a day after Markit and the Chartered Institute of Purchasing & Supply said that their U.K. construction PMI declined to a 17-month low of 57.6 last month.

The weak data underlined expectations that the Bank of England will keep rates on hold for most of 2015.

Markets were also jittery amid ongoing uncertainty over Greece's future in the euro zone if far-left anti-austerity party Syriza won elections due to be held later this month.

Meanwhile, demand for the dollar continued to be underpinned by the diverging policy outlook between the Federal Reserve and central banks in Europe and Japan.

The Fed is widely expected to raise interest rates in the coming year as the steady economic recovery in the U.S. continues.

Sterling was steady against the euro, with EUR/GBP at 0.7844.

The single currency remained under broad selling pressure after late last week European Central Bank President Mario Draghi said the risk of it not fulfilling its mandate of price stability is higher now than six months ago. The remarks indicated that the likelihood of full blown quantitative easing has increased ahead of the ECB's meeting on January 22.

Later in the day, the U.S. was to release a report on ADP nonfarm payrolls, in addition to data on the trade balance. In addition, the Fed was to publish the minutes of its most recent meeting.

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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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