Forex - GBP/USD holds gains after Bernanke remarks

The pound held gains against the U.S. dollar on Wednesday, trading near two-week highs after comments by Federal Reserve Chairman Ben Bernanke sent the greenback lower, while the minutes of the Bank of England's latest meeting continued to support demand for sterling. 

GBP/USD hit 1.5244 during U.S. morning trade, the pair's highest since July 4; the pair subsequently consolidated at 1.5221, gaining 0.42%. 

Cable was likely to find support at 1.5079, the session low and resistance at 1.5304, the high of July 3. 

During prepared testimony to the Financial Services Committee in Congress, Bernanke said the bank’s bond purchase program could be tapered at a faster pace, slower pace or even temporarily increased depending on economic and financial developments.

Bernanke said the economic recovery was continuing at a moderate pace but reiterated that accommodative monetary policy will still be necessary for the foreseeable future. 

Earlier Wednesday, the minutes of the BoE's July meeting showed that policymakers voted unanimously to leave the size of bank’s GBP25 billion asset purchase program unchanged and to keep interest rates on hold at 0.5%.

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, 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. 

Sterling was higher against the euro with EUR/GBP dropping 0.57%, to hit 0.8635. 

Also Wednesday, official data showed that the number of building permits issued in June fell 7.5% to a seasonally adjusted 0.911 million, confounding expectations for an increase of 1.5% to 1.000 million units.

U.S. housing starts plunged by 9.9% last month to hit a seasonally adjusted 0.836 million, compared to expectations for an increase of 3.9% to 0.959 million.