Forexpros – The pound erased gains against the U.S. dollar on Monday, pulling away from a two-day high as ongoing concerns over the debt crisis in the euro zone persisted, despite reassurances by the region’s leaders to tackle financial troubles.
GBP/USD pulled back from 1.5840, the pair’s highest since May 17, to hit 1.5787during European afternoon trade, down 0.18%.
Cable was likely to find support at 1.5730, the low of May 18 and a two-month low and resistance at 1.5860, the high of March 16.
Sentiment briefly strengthened after a weekend summit of the Group of Eight nations saw leaders affirm that they want Greece to remain in the euro zone, but leaders failed to reach an agreement on how to calm market turmoil stemming from the crisis in the region.
Concerns over political turmoil in Greece also eased after opinion polls indicated that pro-bailout party, New Democracy was leading the polls ahead of fresh elections, due to be held on June 17.
However, investors remained wary amid fears over the implications of a Greek exit from the euro area, while concerns over the health of Spain’s banking sector also weighed.
Demand for the pound remained weaker after last week’s Bank of England inflation report warned of the risk to the U.K. economic recovery stemming from the euro zone crisis and sparked speculation over the possibility of fresh easing measures from the central bank.
Elsewhere, sterling was hovering just above a two-week low against the euro with EUR/GBP easing 0.04%, to hit 0.8075.
Markets were looking ahead to a meeting between German Finance Minister Wolfgang Schaeuble and his newly appointed French counterpart, Pierre Moscovici, later in the day, as European Union leaders prepared for Wednesday’s summit meeting.
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