Investing.com - The pound slipped to a fresh one-month low against the U.S. dollar on Wednesday, despite the release of upbeat U.K. data as investors remained cautious ahead of the Federal Reserve’s policy decision due later in the day.
GBP/USD hit 1.2946 during European morning trade, the pair’s lowest since August 16; the pair subsequently consolidated at 1.2976, slipping 0.10%.
Cable was likely to find support at 1.2871, the low of August 16 and resistance at 1.3092, the high of September 19.
Markets shrugged off a report by the U.K. Office for National Statistics saying that public sector net borrowing rose by £10.05 billion in August, compared to expectations for an increase of £10.30 billion.
Public sector net borrowing declined by £2.43 billion in July, whose figure was revised from a previously estimated £1.47 billion drop.
Investors remained cautious ahead of the Fed’s monthly policy decision, due later Wednesday. Although most traders expect the U.S. central bank to hold back from raising interest rates this month, any comments regarding the Fed’s future policy moves will be closely watched.
The pound also hit one-month lows against the yen, with USD/JPY at 132.15 after the Bank of Japan earlier said it was abandoning its target to increase the monetary base and left interest rates unchanged at minus 0.1%.
The BoJ instead adopted "yield curve control" under which it will buy long-term government bonds to keep 10-year bond yields at current levels around 0%.
The central bank also said it would continue to buy long-term government bonds at a pace that ensures its holdings increase by ¥80 trillion per year.
The pound was steady against the euro, with EUR/GBP at 0.8590.