The pound was mixed against other major currencies in early deals Thursday ahead of the Bank of England's monetary policy decision which is due to announce at 7:00 am ET. While the pound edged lower against the dollar and the yen, it held steady against the euro and the Swiss franc.
No change in policy is expected when the Bank of England conclude its monetary policy meeting today, given the recent run of positive data and comments. Most economists expect the nine-member Monetary Policy Committee will maintain the quantitative easing at GBP 375 billion and the interest rate at 0.50 percent.
The Bank of England is unlikely to add to its asset purchase programme for at least now, as the economy exited a double-dip recession and the positive impact of the Funding for Lending Scheme is yet to fully filter into the economy.
BoE chief Mervyn King recently said the central bank is ready to add more stimulus if the recent positive signs in the economy fade. At the October meeting, there were differences of views about further easing, signaling that today's meeting will be a closer call.
The pound reached an 8-day low of 127.26 against the yen around 6:00 am ET. The pair is heading towards the channel support around the 126.50 level unless any risk sentiment help the bulls push the price back above 129.0.
Japan's core machinery orders fell a seasonally adjusted 4.3 percent in September from the previous month, falling for the second straight month and missing forecasts for a decline of 2.1 percent.
Data from the Ministry of Finance said that Japan saw a current account surplus of 503.6 billion yen in September, below forecasts for a surplus of 761.3 billion yen but up from 454.7 billion yen in August.
The trade deficit came in at 471.3 billion yen, up from the 644.5 billion yen shortfall a month earlier.
Exports were down 10.5 percent on year to 5.104 trillion yen, while imports added an annual 4.5 percent to 5.575 trillion yen.
The pound fell to 1.5931 against the US dollar around 5:30 am ET, its weakest level since October 23. If the cable weakens beyond the 1.5915/20 support, it could set its weakest level since September 6.
The dollar rose on increasing safe-haven flows into it as the market focus shifted to fiscal cliff form Obama's victory in the election as Republicans control the lower-house.
The pound failed to continue its Asian session rallies against the euro and the Swiss franc in early deals Thursday and both pairs moved in ranges most of the early European session. The pound-franc pair moved in a range of 1.5128 and 1.5090, while the euro-pound pair traded in a range between 0.7997 and 0.7975.
Switzerland's unemployment rate rose slightly to 3 percent on a seasonally adjusted basis in October from 2.9 percent in September, the State Secretariat for Economic Affairs said today. The outcome was in line with economists' forecast.
The market is also waiting for the European Central Bank interest rate decision, which is due to announce at 7:45 am ET. The central bank is seen holding its interest rate at 0.75 percent. ECB President Mario Draghi will hold a regular press conference at 8.30 am ET.
The U.S. weekly jobless claims for the weekended November 3 and the trade balance for September are the key data to watch in the North American session.
