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Forex - GBP/USD edges lower as sentiment wanes

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Investing.com -

Investing.com - The pound edged lower against the U.S. dollar on Thursday, as recent comments by Federal Reserve Chairwoman Janet Yellen continued to support demand for the greenback and fresh concerns over tensions in Ukraine dampened market sentiment.

GBP/USD hit 1.7108 during European morning trade, the pair's lowest since July 15; the pair subsequently consolidated at 1.7111, slipping 0.15%.

Cable was likely to find support at 1.7060, the low of July 15 and resistance at 1.7192, the high of July 15 and an almost six-year high.

The greenback strengthened broadly after Ms. Yellen said Tuesday that rates could rise sooner if the economic recovery continued to improve. However, the Fed chair also said that if the recovery was disappointing monetary policy would remain accommodative.

Separately, markets were jittery as the U.S. and the European Union announced on Wednesday a fresh round of sanctions against Russia, following the annexation of Crimea in April and ongoing tensions in the rest of Ukraine. The U.S. package was the largest round of penalties so far.

In reponse to the sanctions, Russian President Vladimir Putin said that relations with the U.S. are in danger of reaching a "dead end" and could damage U.S. business interests in his country.

The pound remained mildly supported however, after data on Wednesday showed that the U.K. unemployment rate fell to 6.5% in the three months to May, the lowest since late 2008. However, wage growth in the same period remained weak, slightly tempering expectations for a rate hike by the Bank of England this year.

Elsewhere, the euro pulled back from almost two-year lows against sterling, with EUR/GBP up 0.18% to 0.7907, off lows of 0.7889.

The euro found some support after data on Thursday confirmed that the annual rate of inflation in the euro area came in at 0.5% in June, unchanged from a preliminary estimate.

Later in the day, the U.S. was to publish reports on initial jobless claims, housing starts, building permits, and the Philly Fed manufacturing index.

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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.

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