The pound remained higher against the dollar on Thursday after the Bank of England announced no changes to monetary policy following its first meeting of the year, in a widely anticipated decision.
GBP/USD touched session highs of 1.6480, the strongest since January 2 and was last up 0.11% to 1.6462.
Cable was likely to find support at 1.6375, Wednesday’s low and resistance at 1.6500.
The BoE left rates on hold at 0.5% and announced no change to the size of its GBP375 billion asset purchase program, as was widely expected.
Sterling’s gains were held in check as investors remained cautious ahead of the European Central Bank’s policy decision later in the session and Friday’s closely watched U.S. jobs report for December.
Demand for the dollar continued to be underpinned after data on Wednesday showed that the U.S. private sector added the largest number of jobs since November 2012 last month.
Meanwhile, Wednesday’s minutes of the Federal Reserves’ December meeting showed that the bank cited a stronger labor market in its decision to cut its asset purchase program by USD10 billion, reducing it to USD75 billion-a-month.
Earlier Thursday, data showed that Britain’s trade deficit narrowed slightly more than expected in November as exports to Europe picked up.
The Office for National Statistics said the trade deficit narrowed to GBP9.44 billion from a downwardly revised deficit of GBP9.65 billion in October. Economists had forecast a deficit of GBP9.45 billion.
Exports to the European Union rose to GBP12.75 billion in November the ONS said, the highest level since August.
Elsewhere, EUR/GBP hit session highs of 0.8277 and was last up 0.15% to 0.8265, still close to the one-year low of 0.8241 struck on Wednesday.
The single currency remained under pressure after data earlier in the week showed that the annual rate of inflation in the euro zone slowed to 0.8% in December, from 0.9% in November. The data sparked fresh concerns over the risk of deflation in the region ahead of the ECB’s monthly meeting.
Jerusalem Post Annual Conference. Buy it now, Special offer. Come meet Israel's top leaders