Forexpros – The broadly weaker pound remained lower against the U.S. dollar on Monday, amid concerns over prospects for more easing measures from the Bank of England, while caution over steps to tackle the debt crisis in the euro zone also weighed.
GBP/USD hit 1.5547 during European afternoon trade, the session low; the pair subsequently consolidated at 1.5578, shedding 0.41%.
Cable was likely to find support at 1.5529, the low of August 1 and resistance at 1.5656, Friday’s high.
The pound came under pressure amid concerns that the BoE will cut its forecast for growth in Wednesday’s quarterly inflation report, increasing the likelihood for further stimulus measures from the central bank.
Earlier Monday, a report by mortgage lender Halifax showed that U.K. house prices fell by 0.6% in July, slightly more than expectations for a 0.5% decline, indicating that the pattern of broadly stable house prices is remaining unchanged.
Meanwhile, investors remained cautious after the European Central Bank indicated last week that it may restart its bond buying program, to help lower Spanish and Italian borrowing costs.
ECB President Mario Draghi said any such action was conditional on euro zone governments experiencing difficulty on bond markets applying to the bloc’s bailout funds to purchase government bonds and accepting strict conditions and supervision.
Spanish Prime Minister Mariano Rajoy has indicated that Madrid may ask for a full-scale bailout.
The yield on Spanish 10-year bonds was at 6.78% on Monday, close to the 7% threshold widely seen as unsustainable if a country is to remain solvent.
Sterling was lower against the euro, with EUR/GBP up 0.44% to 0.7953.
Later in the day, Federal Reserve Chairman Ben Bernanke was to speak; his comments would be closely watched by investors amid ongoing speculation over further monetary stimulus after data on Friday showed that the U.S. unemployment rate unexpectedly ticked up to 8.3%, from 8.2% in the preceding month.
The U.S. economy added 163,000 jobs in July, the biggest increase since February and outstripping expectations for an increase of 100,000.
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