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Forex - GBP/USD remains higher on BoE statement, Draghi remarks

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Investing.com - The pound remained higher against the U.S. dollar on Thursday, after the Bank of England kept monetary policy unchanged and as comments by European Central Bank head Mario Draghi supported sentiment.

GBP/USD hit 1.5082 during U.S. morning trade, the session high; the pair subsequently consolidated at 1.5050, adding 0.21%.

Cable was likely to find support at 1.4964, the session low and the pair's lowest since July 2010 and resistance at 1.5154, Wednesday's high.

BoE policymakers voted to leave interest rates on hold at a record low 0.5% and keep the size of its asset purchase program unchanged at GBP375 billion.

The minutes of the meeting will be published on Wednesday March 20. The minutes of the central bank's February meeting showed that three policymakers, including Governor Mervyn King, voted in favor of resuming asset purchases.

Concerns over the outlook for the recession hit U.K. economy have weighed heavily on sterling so far this year and bolstered expectations for more quantitative easing by the BoE.

Sentiment also improved after ECB President Draghi said monetary policy will remain firmly accommodative and added that confidence was returning to financial markets.

Speaking at the ECB's post-policy meeting press conference, Draghi said policymakers discussed a rate cut but the "prevailing consensus" was to leave interest rates unchanged at 0.75%.

In addition, the ECB revised down economic forecasts for 2013, with euro zone gross domestic product now expected to contract by between 0.1% and 0.9% from a previous forecast for growth of between 0.3% and a contraction of 0.9%.

Elsewhere, sterling was lower against the euro with EUR/GBP advancing 0.82%, to hit 0.8709.

Also Thursday, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits fell by 7,000 to a seasonally adjusted 340,000 last week, compared to expectations for an increase of 8,000 to 355,000.

A separate report showed that the U.S. trade deficit widened to a seasonally adjusted USD44.5 billion in January from a deficit of USD38.1 billion the previous month.

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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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