Forex - GBP/USD at 1-week lows ahead of U.S. data

The pound fell to one-week lows against the stronger dollar on Thursday after the minutes from the Federal Reserve’s latest meeting indicated that the bank is on track to start scaling back stimulus later this year.

GBP/USD hit 1.5562 during European afternoon trade, the lowest since August 15; the pair subsequently consolidated at 1.5582, shedding 0.50%.

Cable is likely to find support at 1.5530 and resistance at 1.5650, the high of August 15.

The dollar rallied against the other major currencies after the minutes of the Fed’s July meeting showed that officials were "broadly comfortable" with plans to start unwinding the bank’s USD85 billion-a-month bond buying program.

However, officials remain divided over the timing of possible reduction, with almost all committee members agreeing that a change in the asset purchase program was not yet appropriate. 

The minutes described recent U.S. economic data as “mixed”, indicating that plans to taper could be pushed back if the economy was to weaken.

Elsewhere, sterling pulled back from session lows against the euro, withEUR/GBP up 0.22% to 0.8546, down from highs of 0.8574.

The single currency hit session highs against the pound, dollar and yen earlier after data showed that manufacturing activity in the euro zone expanded at the fastest pace in 26 months in August.

The flash euro zone manufacturing purchasing managers’ index rose to 51.3 from a final reading of 50.3 in July. Analysts had expected the index to inch up to 50.8.

Meanwhile, the flash euro zone services PMI rose to a 24-month high of 51.0 from 49.8 in July, better than expectations for a reading of 50.2.

Germany’s manufacturing PMI rose to a 25 month high of 52.0, while the country’s services PMI rose to a six-month high of 52.4.

Investors were looking ahead to U.S. data on initial jobless claims later in the trading day.