Forex - GBP/USD pushes higher before Fed minutes

The pound pushed higher against the dollar on Wednesday, ahead of minutes from the Federal Reserve’s latest policy meeting and a keenly anticipated speech by Fed Chairman Ben Bernanke.

GBP/USD hit 1.4923 during European afternoon trade, the session high; the pair subsequently consolidated at 1.4901, gaining 0.25%.

Cable was likely to find support at 1.4812, Tuesday’s low and a three-year low and resistance at 1.4980, Tuesday’s high.

The dollar looked likely to resume its strengthening trend if the Fed minutes and Ben Bernanke reiterated that the U.S. central bank is close to tapering its asset purchase program. 

The pound dropped to its lowest since June 2010 against the dollar on Tuesday after unexpectedly weak U.K. manufacturing data increased the likelihood of further easing by the Bank of England.

Last week the BoE indicated that interest rates are likely to remain at record low levels, given weakness in the U.K.’s economic recovery.
Sterling was little changed against the euro, with EUR/GBP inching up 0.04% to 0.8599.

The single currency remained under pressure after a senior European Central Bank policymaker said Tuesday that the bank’s forward guidance on interest rates extended beyond 12 months.

The comments came after ECB President Mario Draghi said last week that rates would remain at low levels for an “extended” period, amid ongoing weakness in the euro zone economy.