Forex - GBP/USD erases losses after BoE holds

The pound erased losses against the U.S. dollar on Thursday, as the Bank of England announced no changes to monetary policy following its policy-setting meeting, although the Federal Reserve's policy statement on Wednesday continued to support the greenback. 

GBP/USD pulled away from 1.5127, the session low, to hit 1.5235 during European afternoon trade, up 0.15%. 

Cable was likely to find support at 1.5079, the low of July 17 and resistance at 1.5354, the high of July 30. 

The BoE left interest rates on hold at a record low 0.5% and kept the size of its asset purchase program unchanged at GBP375 billion, at Governor Mark Carney's first meeting at the head of the central bank.

Mark Carney, formerly at the head of the Bank of Canada, replaced Mervyn King as Bank of England governor on July 1. 

The decision came after Markit said the U.K. manufacturing purchasing managers' index rose to 54.6 last month, from a reading of 52.9 in June. Analysts had expected the index to tick down to 52.8 in July. 

The greenback found support after the Fed on Wednesday said it would keep buying USD85 billion a month in mortgage and Treasury securities and added that the pace of economic growth is "modest". 

Market players were looking ahead to highly-anticipated data on U.S. nonfarm payrolls due on Friday for indications of how the recovery in the U.S. labor market is progressing. 

Sterling was higher against the euro with EUR/GBP retreating 0.64%, to hit 0.8690. 

Also Thursday, Markit said the euro zone's manufacturing PMI rose to 50.3 in July, from a reading of 50.1 the previous month. Analysts had expected the index to remain unchanged last month. 

But sentiment on the euro remained fragile ahead of the ECB's upcoming policy statement, as well as ECB President Mario Draghi's traditional press conference. 

Later in the day, the U.S. was to publish official data on weekly unemployment claims, followed by a report by the Institute of Supply Management on manufacturing activity.