Forexpros – The pound slumped to a six-week low against the U.S. dollar on Wednesday, as the outlook for riskier assets was clouded by ongoing concerns over the euro zone and after disappointing Chinese manufacturing data.
GBP/USD hit 1.5558 during European morning trade, the pair’s lowest since October 12; the pair subsequently consolidated at 1.5567, shedding 0.41%.
Cable was likely to find support at 1.5421, the low of October 7 and resistance at 1.5691, Tuesday’s high.
Market sentiment was hit by speculation that France’s triple A credit rating might be in danger after a Belgian newspaper report that Belgium and France were in fresh talks over an existing bailout plan for troubled lender Dexia sparked concerns that France could have to play a larger role in the rescue.
In addition, official data showed that manufacturing activity in the euro zone declined for the fourth consecutive month in November, falling to its lowest level since July 2009 with German manufacturing activity tumbling to a 28-month low.
Elsewhere, China’s November HSBC preliminary manufacturing purchasing managers’ index fell to a 32-month low, adding to fears over a ‘hard landing’ in the world’s second largest economy.
The pound was almost unchanged against the euro, with EUR/GBP dipping 0.01% to hit 0.8636.
Later in the day, the Bank of England was to publish the minutes of its November policy meeting.
The U.S. was to publish a string of economic data ahead of Thursday’s Thanksgiving holiday, including a government report on durable goods orders, the weekly report on initial jobless claims as well as data on crude oil stockpiles, inflation, personal income and personal spending.
Meanwhile, the University of Michigan was to release revised data on inflation expectations and consumer sentiment.
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