(MENAFN– ecpulse)
The FX market moved lower in the European session on Wednesday, after the World Bank cuts its global growth forecast, while the pound rose against the dollar after data showed UK unemployment fell to the lowest level in more than five years.
The sterling reacted positively following a report which showed that confirmed signs of recovery in the UK labor markets. Earlier today, data from the International Labor Organization showed that the UK Jobless rate retreated 6.6% in the quarter ended April from 6.8%, compared to forecasts of 6.7%. The report was upbeat and had helped the pound rise against its US counterpart.
As of 12:47 GMT, the GBPUSD traded around 1.6877 after setting an intraday high at 1.6765 and low at 1.3738 compared with the open at 1.6754. The pair is currently targeting 1.6795a and if this level was breached then we might see a further upside move towards the new target at 1.6805.
Much of today`s FX volatility was boosted by the World Bank forecast as the global lender downgraded its growth forecast for the global economy, following what it called a "bumpy start" this year amid weaker prospects for the US, Russia and China.
The world economy is expected to expand 2.8% this year, the World Bank said in its Global Economic Prospects report Tuesday, compared with a January forecast of 3.2%.
The euro-area economic growth was unchanged at 1.1%, while Japan was revised lower to 1.3% from 1.4%.
The euro fell for the fourth day against the dollar, still weighed by the European Central Bank`s rate cuts last Thursday.
As of 12:48 GMT, the EURUSD was down around 1.3533 after setting a session high at 1.3546 and low at 1.3521 from the day`s open at 1.3546. The pair is so far targeting 1.3605 level which if broken then we might see further an extension to the bearish move.
The dollar was weighed by the World Bank forecast suggesting the US economy will only grow 2.1% this year, down from 2.8% growth expected previously.
As of 12:49 GMT, the USDIX traded around 80.79 after setting an intraday high at 80.29 and low at 80.78 compared with the open at 80.84.
The Japanese yen looked less downbeat, rising against the dollar amid growing speculation that the Bank of Japan is unlikely to push on further monetary stimulus.
As of 12:49 GMT, the USDJPY traded around 102.03 after setting an session high at 102.38 and low at 102.01 from the day`s open at 102.32. The pair is trying to breach support level at 102.05 which if broken we might see the pair targeting 101.90, 101.65 then 101.60 and perhaps beyond.
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