Forexpros – The pound extended its decline against the U.S. dollar on Wednesday, dropping to a two-week low, as ongoing political uncertainty in Greece saw investors flock to safe haven assets, amid fears over a possible Greek exit from the euro zone.
GBP/USD hit 1.6087 during European afternoon trade, the pair’s lowest since April 25; the pair subsequently consolidated at 1.6089, shedding 0.42%.
Cable was likely to find support at 1.6008, the low of April 19 and resistance at 1.6161, the session high.
Concerns over Greece’s future in the single currency bloc mounted after Alexis Tsipras, the head of Greece’s second-biggest party Syriza, said Tuesday that Greece’s financial aid package is null and void and called for a moratorium on Greek debt payments.
Tsipras was to hold talks with Greece’s leading political parties later in the day, as attempts to form a government continue, but a second round of elections is looking increasingly likely.
Earlier Wednesday, the yield on Spanish 10-year bonds rose above 6%, amid investor concerns that the debt crisis could spread from Greece.
Investors also remained concerned over whether French president-elect Francois Hollande’s focus on growth rather than austerity measures as a means to tackle the crisis could spark tensions with Germany.
The pound was hovering close to a three-and-a-half year high against the euro, with EUR/GBP inching up 0.04% to hit 0.8051.
Also Wednesday, data showed that U.K. retail sales posted their biggest fall in more than a year in April, as unseasonably wet weather weighed on sales of summer clothing and outdoor goods.
The British Retail Consortium said retail sales tumbled 3.3% year-on-year, following a 1.3% rise in March, confounding expectations for a 0.5% gain.
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