Forexpros – The pound was lower against the U.S. dollar on Monday, but sterling remained supported as market sentiment was boosted by the reassuring results of Greece’s highly anticipated weekend elections.
GBP/USD hit 15669 during European morning trade, the daily low; the pair subsequently consolidated at 1.5662, falling 0.34%.
Cable was likely to find support at 1.5607, the low of May 29 and resistance at 1.5741, the day’s high.
Market sentiment found support earlier, as political parties supporting Greece’s international bailout were to begin forging a government on Monday, after an election victory over radical leftists staved off the prospect of the debt-laden country leaving the euro zone.
Conservative New Democracy leader Antonis Samaras called for broad support after winning Sunday’s election over the radical Syriza party, which had threatened to cancel the aid deal in defiance of the country’s lenders.
Investors remained cautious however, as concerns over the handling of Greece’s financial crisis persisted. While all eyes turned to Germany for possible concessions on the harsh budgetary restrictions imposed on Athens, German Foreign Minister Guido Westerwelle said on Monday the substance of Greece’s reform program remained non-negotiable.
Meanwhile, fresh concerns over the euro zone’s debt crisis were sparked by surging borrowing costs in Spain, as the yield on the country’s 10-year government bonds climbed to 7.2% earlier, a euro-era high.
In the U.K., industry data showed earlier that house price inflation rose 1% in June, following a flat reading the previous month.
Markets were also jittery amid speculation over whether the Bank of England will soon implement more monetary easing, after announcing on Friday an emergency liquidity package to support the U.K. banking system.
The pound was also lower against the euro with EUR/GBP rising 0.41%, to hit 0.8081.
Later in the day, a two-day G-20 summit was set to begin in Mexico.
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