Forex - GBP/USD higher after BoE minutes, Bernanke eyed

The pound rose to session highs against the dollar on Wednesday after the minutes of the Bank of England’s July meeting showed that policymakers voted unanimously to keep the bank’s quantitative easing program unchanged.

GBP/USD hit 1.5244 during European afternoon trade, the pair’s highest since July 4; the pair subsequently consolidated at 1.5216, up 0.39%.

Cable was likely to find support at 1.5043, Tuesday’s low and resistance at 1.5287 the high of July 4

BoE policymakers voted to leave the size of bank’s GBP25 billion asset purchase program unchanged and to keep interest rates on hold at 0.5% at the first meeting under the leadership of new Governor Mark Carney.

Two policymakers who had previously voted in favor of more stimulus said it remained "warranted".

“An expansion of the asset purchase program remained one means of injecting stimulus, but the Committee would be investigating other options during the month, and it was therefore sensible not to initiate an expansion at this meeting” the minutes said.

The BoE took steps to give forward guidance to markets on interest rates at its July meeting, indicating that interest rates are likely to remain at record low levels, given weakness in the U.K.’s economic recovery.

Meanwhile, official data showed that the number of people claiming unemployment benefits in the U.K. declined significantly more-than-expected in June and the unemployment rate remained unchanged.

The Office for National Statistics said that the claimant count fell by a seasonally adjusted 21,200 in June, better than expectations for a decline of 8,000.

The previous month’s figure was revised to a drop of 16,200 people from a previously reported decrease of 8,600.

The rate of unemployment held steady at 7.8% in May, in line with expectations and unchanged from April. 

The ONS said average earnings in the U.K. rose by a seasonally adjusted 1.7% in May, above expectations for a 1.4% increase, after rising by 1.3% in the previous month.

The pound’s gains were capped ahead of keenly anticipated testimony on monetary policy by Federal Reserve Chairman Ben Bernanke later in the global day, amid speculation over the timing of a possible reduction to the bank’s USD85 billion-a-month bond buying program.

Bernanke was expected to reiterate that the bank could start scaling back its asset purchase program by the end of this year if the economy continues to pick up, but that interest rates will remain at record lows for the foreseeable future.

Elsewhere, sterling rose to session highs against the euro, withEUR/GBP dropping 0.64% to 0.8628.

The U.S. was to release official data on building permits and housing starts later Wednesday.