Pound climbs slightly against dollar

The pound clawed back some losses against the dollar on Wednesday, as investors waited on the conclusion of the Federal Reserve meeting.



The pound decreased to the session low of 1.5534 against the greenback when data showed that UK GDP shrank more than was predicted in the final quarter of 2011 – down 0.2 per cent. 



A second reason was the minutes of the Bank of England’s latest meeting, which revealed UK policymakers still believe their country us still at risk from the global economy, reports the website Forex Pros.


The day before, BoE Governor Mervyn King, revealed that falls in inflation hae allowed the central bank to inject more stimulus to help the economy, and also keep interest rates at all-time lows.

King added that the global economy’s growth is likely to be slow, and that the UK faces an economic recovery that will be "arduous, long and uneven".

The possibility of a default by Greece is also weighing on market sentiment, as the discussions to restructure the debt remains unchanged. Also in the US, pending home sales decreased more-than-expected last month, after climbing to a 19-month high in November. This was confirmed by The National Association of Realtors, which said the pending home sales index dropped by 3.5 per cent, much higher than the expected one per cent drop.