Forexpros – The pound dropped to a one-month low against the U.S. dollar on Monday, as concerns over escalating sovereign debt issues in the euro zone and the U.S. weighed on demand for riskier assets.
GBP/USD hit 1.5689 during European morning trade, the pair’s lowest since October 20; the pair subsequently consolidated at 1.5699, shedding 0.67%.
Cable was likely to find short-term support at 1.5631, the low of October 18 and resistance at 1.5797, the days high.
In Spain, the center-right opposition People’s Party took a majority in Parliament after elections on Sunday and was expected to push through drastic austerity measures to try shore up the country’s economy and regain the country’s triple A credit rating.
But investors remained uncertain as the borrowing costs of many euro zone states remained close to euro-era highs after coming under increasing pressure last week.
Meanwhile, a U.S. congressional “super committee” was expected to announce later that it had failed in a three-month-long effort to draft a USD1.2 trillion deficit reduction plan.
The pound was also lower against the euro, with EUR/GBP rising 0.14% to hit 0.8570.
Later in the day, the U.S. was to publish industry data on existing home sales.
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