Forexpros – The pound was down against the U.S. dollar on Thursday, as concerns over funding issues in the euro zone saw investors shun riskier assets ahead of a closely watched French government bond auction.
GBP/USD hit 1.5559 during early European trade, the daily low; the pair subsequently consolidated at 1.5563, shedding 0.35%.
Cable was likely to find support at 1.5500, Tuesday’s low and resistance at 1.5628, the session high.
France planned to auction up to EUR8 billion of 10 to 30-year bonds one day after an auction of German 10-year bonds met with lackluster investor demand.
France is seen as vulnerable to losing its triple-A sovereign credit rating in the coming weeks, after ratings agency Standard & Poor’s warned of a mass euro zone downgrade last month, amid concerns over the management of the financial crisis in the region.
Elsewhere, concerns over the health of the European banking sector also supported safe haven demand for the greenback.
Meanwhile, sterling was trading at a 16-month high against the broadly weaker euro, with EUR/GBP shedding 0.20% to hit 0.8267.
Later in the day, the U.K. was to release data on service sector growth. Also Thursday, the U.S. was to release the ADP report on private sector employment as well as data on initial jobless claims and service sector activity.
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