Forexpros – The pound was lower against the U.S. dollar on Monday, as risk sentiment weakened following reports of the death of North-Korean leader Kim Jong il.
GBP/USD hit 1.5466 during European morning trade, the pair’s lowest since December 15; the pair subsequently consolidated at 1.5499, declining 0.28%.
Cable was likely to find support at 1.5408, the low of December 14 and resistance at 1.5594, the high of November 28.
The dollar strengthened broadly on the news of Kim Jong il’s death as concerns over geopolitical instability in northeast Asia escalated amid uncertainty over the future leadership of the state.
Sentiment was also hit after Fitch ratings agency warned on Friday it may downgrade France and six other euro zone countries as it believes that a comprehensive solution to the region’s debt crisis is “technically and politically beyond reach.”
Moody’s cut Belgium by two notches to Aa3 from Aa1, citing risks to economic growth and the costs of bailouts of banks such as Dexia.
In the U.K., a report by Rightmove showed earlier that house price inflation fell 2.7% in December after a 3.1% decline the previous month.
Sterling was also lower against the euro with EUR/GBP adding 0.12%, to hit 0.8401.
Later in the day, European Union leaders were to hold talks to discuss measures to resolve the debt crisis, including the possibility of European nations lending EUR200 billion to the International Monetary Fund.
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