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Forex - GBP/USD erases losses on BoE statement, U.S. data

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Investing.com - The pound erased losses against the U.S. dollar on Thursday, after the Bank of England left its monetary policy unchanged, while disappointing U.S. jobless data weighed on the greenback.

GBP/USD pulled away from 1.5034, the pair's lowest since March 20, to hit 1.5167 during U.S. morning trade, adding 0.23%.

Cable was likely to find support at 1.5034, the session low and resistance at 1.5258, the high of April 2.

The BoE left interest rates on hold at 0.5% and the size of its asset purchase program unchanged at GBP375 million in a widely expected decision.

The minutes of the bank's last two policy meetings showed that three policymakers, including Governor Mervyn King, voted in favor of more easing.

The decision came on the heels of data showing that the U.K. service sector expanded at the fastest pace in seven months in March, fuelling hopes that the economy will narrowly avoid a triple-dip recession.

The Markit/CIPS services purchasing managers' index rose to 52.4 from a reading of 51.8 in February, compared to expectations for a decline to 51.5.

The report said that service sector growth looked likely to offset contractions in the manufacturing and construction sectors, with PMI data pointing to overall economic growth of 0.1% in the first quarter.

In the U.S., the Department of Labor said the number of people who filed for unemployment assistance last week rose by 28,000 to a seasonally adjusted 385,000, compared to expectations for a decrease of 7,000 to 350,000.

Jobless claims for the preceding week rose by an unrevised 357,000.

Sterling was fractionally higher against the euro with EUR/GBP easing 0.07%, to hit 0.8484.

Also Thursday, European Central Bank President Mario Draghi said the bank would closely monitor incoming data and was ready to act to cut rates if needed.

The comments came after the ECB kept rates on hold at 0.75%.

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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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