Forex - GBP/USD hits 2-day low after U.K. budget, BoE minutes

Forex Pros – The pound was trading close to a two-day low against the U.S. dollar on Wednesday, after the U.K. government revised down its economic growth forecast for 2011and said inflation would remain above target next year.

GBP/USD hit 1.6220 during U.S. morning trade, the pair's lowest since Monday; the pair subsequently consolidated at 1.6246, shedding 0.71%.

Cable was likely to find support at 1.6059, the low of March 18 and resistance at 1.6400, Tuesday's high and a 14-month high.

During his budget speech, U.K. Chancellor of the Exchequer George Osborne said the Office for Budget Responsibility now expected economic growth of 1.7% in 2011, down from November's 2.1% forecast.

Mr. Osborne also said the government will borrow GBP122 billion in 2011-12, up from a prior forecast of GBP117 billion.

The pound was also down against the euro, with EUR/GBP rising 0.17% to hit 0.8690.

Also Wednesday, the minutes of the Bank of England's most recent policy setting meeting showed the bank saw “merit in waiting” to examine the effect of higher oil prices, dampening speculation over an interest rate hike by the bank in the coming months.

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