Forex - GBP/USD pares losses, tracking euro higher

Forex News – The pound pared losses against the U.S. dollar on Thursday, pulling back from a 14-month low, tracking the euro’s gains and recovering some of the ground lost earlier after the Bank of England launched a second round of monetary easing.

GBP/USD pulled back from 1.5270, the pair’s lowest since July 23, 2010, to hit 1.5395 during U.S. morning trade, still down 0.42% on the day.

Cable was likely to find support at 1.5270, the days low and a 14-month low and resistance at 1.5518, the high of September 22.

The euro erased losses after the European Central Bank announced new measures to refinance European lenders and said it will resume buying bank bonds. The announcement came after the ECB left its interest rate unchanged at 1.5%.

The pound fell sharply earlier after the BoE implemented a fresh round of monetary easing measures, amid concerns over weakening economic conditions in the U.K.

BoE policymakers voted to increase the bank’s asset purchase program by GBP75 billion, to GBP275 billion, to shore up the U.K. economy which has come under pressure from government spending cuts, a slowdown in global growth and the deepening financial crisis in the euro zone.

The BoE left interest rates unchanged at a record low of 0.5%.

The pound was also sharply lower against the euro, with EUR/GBP jumping 1.04% to hit 0.8722.

Also Thursday, the U.S. Department of Labor said initial jobless claims rose less-than-expected last week, increasing to a seasonally adjusted 401K, from an upwardly revised 395K the previous week.

Analysts had expected jobless claims to rise by 411K last week.