Forexpros – The pound slid to a one-week low against the U.S. dollar on Monday, as fears that Spain will require a full bailout mounted after two Spanish regions requested financial aid from the government.
GBP/USD hit 1.5548 during European morning trade, the pair’s lowest since July 16; the pair subsequently consolidated at 1.5555, shedding 0.42%.
Cable was likely to find support at 1.5459, the low of July 6 and resistance at 1.5623, the session high.
Concerns over Spain’s finances intensified after the state of Murcia followed Valencia in requesting financial aid from Madrid over the weekend. On Friday, Spain’s government cut growth forecasts for 2013 and said the economy would stay in recession next year.
The yield on Spanish 10-year bonds rose to a record 7.53% Monday, well above the critical 7% threshold widely considered unsustainable in the long run.
In addition, fears over a Greek exit from the euro zone resurfaced, as Athens requested more time to meet the conditions of its international bailout ahead of a meeting with the Troika on Tuesday.
Sterling was hovering close to a three-and-a-half year high against the euro, with EUR/GBP slipping 0.11% to 0.7775.
Neither the U.K. nor the U.S were to release any significant economic indicators on Monday, so markets looked set to remain focused on developments in the euro zone.
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