Forexpros – The pound was trading close to a 17-month low against the U.S. dollar on Monday, as Friday’s mass euro zone downgrade by rating’s agency Standard & Poor’s supported safe haven demand for the greenback.
GBP/USD hit 1.5278 during European morning trade, the daily low; the pair subsequently consolidated at 1.5313, dipping 0.03%.
Cable was likely to find support at 1.5232, Friday’s low and a 17-month low and resistance at 1.5366, last Thursday’s high.
S&P cut the ratings of France and eight other euro-zone nations on Friday, following warnings in December and said it would decide shortly whether to cut the triple-A rating on the euro zone’s bailout fund, the European Financial Stability Facility.
Reacting to the downgrades, U.K. Chancellor of the Exchequer George Osborne said earlier that the euro zone needs to show that it can stand behind the shared currency and resolve Greece’s debt crisis.
Investors were also jittery after talks aimed at negotiating a restructuring of Greece’s debts broke down on Friday, amid disagreements over how much money investors will lose by swapping their bonds, raising fears over a possible default. The talks were set to resume later in the week.
The pound was fractionally lower against the euro, with EUR/GBP inching up 0.03% to hit 0.8279.
Earlier in the day, a report by the U.K.’s largest property website Rightmove showed that house prices were up 1.4% in the first week of 2012, but remained down 0.8% on the month, indicating that a shortage of new sellers is likely to underpin prices this year.
Also Monday, markets in the U.S. were to remain closed for a national holiday.
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