Sterling eased against the dollar on Wednesday after minutes from the US Federal Reserve's latest policy-setting committee meeting showed some policymakers were keen to end asset purchases this year. The pound also weakened against the euro, although losses were limited since solid industrial output data on Tuesday has increased the chances that Britain has avoided slipping into recession.
The pound was down 0.1 percent at $1.5310, off a high of $1.5364 hit on Friday when poor US jobs data knocked down the dollar. Support was at its 50-day moving average of $1.5278, while traders reported bids around $1.5300. The Fed's latest minutes showed intense discussions about the benefits and the consequence of asset purchases. A few expected to taper the pace of purchases by midyear and end them later this year, while several others expected to slow the pace a bit later and halt the quantitative easing programme by year-end.
Asset purchases, or quantitative easing, usually weigh down on a currency as they increase its supply. And while the latest British industrial data eased worries about the economy, the possibility of the Bank of England still resorting to more asset purchases in coming months was likely to make investors wary of the pound. "Sterling/dollar is a sell to us. Anything above $1.5450 should be a good opportunity to initiate fresh bets against it with a target in the mid-$1.40s," said Mankesh Jain, head of FX and Investment Management at hedge fund Solo Capital. The euro was up 0.1 percent at 85.41 pence, near a two-week peak of 85.60 pence reached on Tuesday. Above there, however, it may face resistance at the 55-day moving average around 85.84 pence.
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