Forexpros – The pound was hovering just above a six-week low against the U.S. dollar on Tuesday, as the outlook for riskier assets remained shaky ahead of the release of U.S. data on third quarter growth.
GBP/USD hit 1.5692 during European afternoon trade, the daily high; the pair subsequently consolidated at 1.5649, easing up 0.05%.
Cable was likely to find short-term support at 1.5612, Monday’s low and a six-week low and resistance at 1.5797, Mondays high.
Market sentiment improved after ratings agency Fitch said that the failure of a U.S. congressional committee to agree on a package of measures to slash the country’s deficit was likely to result in a revision of the U.S. rating outlook to ‘negative’, rather than a downgrade.
Meanwhile, sovereign debt concerns in the euro zone remained in focus after Spain’s Treasury sold EUR2.98 billion in three and six-month bonds in an auction which saw yields rise to 5.2% for the six-month bills, from 3.3% at a similar auction in October.
It was the first Spanish debt auction since the conservative party’s sweeping election victory on Sunday, but investors have remained jittery as plans on how to cut the deficit and restore market confidence have remained unclear.
In the U.K., official data showed that public sector net borrowing fell more-than-expected in October, declining to GBP3.4 billion from GBP10.2 billion the previous month as growth in tax revenue outpaced spending.
The pound was lower against the euro, with EUR/GBP rising 0.35% to hit 0.8653.
Later Tuesday, the U.S. was to release preliminary data on GDP growth, while the U.S. Federal Reserve was to publish the minutes of its November policy meeting.
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