Pound slips to one-week low vs dollar ahead of BoE rate decision

The UK pound has fallen to an eight-day low on Thursday (April 9) with the market expecting the Bank of England to keep the benchmark interest rate and asset purchase target at the policy review later in the day.

GBP/USD dropped to 1.4763, its lowest since 1 April, from its previous close of 1.4867. The pair had touched a multi-year low of 1.4634 on 18 March and the bounce back from there has managed to break above the 1.5000 mark yet.

Data from the UK earlier in the day were mixed with a better than expected housing market number and disappointing trade scenario.

The Halifax house price index has jumped 0.4% in March reversing the 0.4% decline in the previous month, beating analysts' forecast of 0.2% growth in the prices.

Meanwhile, the trade deficit of the UK widened to £10.3bn ($15.3bn, €14.2bn) in February from £9.17bn at the start of this year while analysts had been expecting a gap of £9.0bn.

Sterling seems to have a weak support at 1.4739, the 1 April low, but a break of that will strengthen the case for a retest of the last month's multi-year trough, and then open up new lows.

The pair has its immediate resistance zone at 1.4950-1.5000 and then 1.5200. A break of that will open doors to 1.5486-1.5554.

The dollar has also rallied to an 8-day high against the euro and the broad strength of the US currency has aided the decline in the pound.

The minutes of the FOMC meeting on 18 March released Wednesday showed that the policymakers are divided on whether to raise interest rates in June.

The UK currency fell against the yen and the euro ahead of the key event. GBP/JPY dropped to 177.56 from 178.62 and EUR/GBP rose to 0.7279 from 0.7250, snapping a three-day losing streak.