Forexpros – The pound remained lower against the U.S. dollar on Monday, as concerns over slow progress in talks on a Greek debt swap deal weighed on risk appetite ahead of a European Union summit later in the day.
GBP/USD hit 1.5654 during European afternoon trade, the daily low; the pair subsequently consolidated at 1.5683, shedding 0.27%.
Cable was likely to find support at 1.5531, the low of January 25 and resistance at 1.5733, the session high and an almost five-week high.
EU leaders were expected to finalize discussions on a pact aimed at enforcing deficit control measures in the region and to sign off on a EUR500 billion permanent rescue fund to be set up this year.
Delays in negotiations between Greece and its private creditors on a debt restructuring plan weighed on risk appetite.
An agreement is necessary for Greece to secure its next tranche of bailout funds in order to avoid a default when a EUR14.5 billion bond repayment comes due on March 20.
Market sentiment found some support after Italy successfully auctioned EUR7.48 billion of long term government debt at lower yields than in similar auctions one month ago.
The auction was a key test of Italy’s ability to raise funds on the international market, coming after a two notch downgrade of the country’s sovereign debt rating by Fitch Ratings on Friday.
But the yields on Portugal’s 10-year government bonds rose above 15% on Monday, amid renewed fears the country may need a second international bailout.
Elsewhere, the pound was up against the euro, with EUR/GBP shedding 0.59% to hit 0.8357.
Later Monday, the U.S. was to publish government data on personal spending and the consumer price index.
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