Forexpros – The pound pared losses against the U.S. dollar on Wednesday, easing back from one-month low but worries over potential debt contagion in core euro zone economies continued to weigh on risk appetite.
GBP/USD pulled back from 1.5754, the pair’s lowest since October 20 to hit 1.5794 during European morning trade, still down 0.18%.
Cable was likely to find support at 1.5680, the low of October 20 and resistance at 1.5867, the high of September 15.
The pound came under pressure after French 10-year bond yields rose to euro-era highs on Tuesday while Italian 10-year bond yields rose to near unsustainable levels, climbing above 7%.
Later Wednesday, Italian Prime Minister-designate Mario Monti was to meet with President Giorgio Napolitano to officially accept the post and present his ministers.
Meanwhile, markets were eyeing Spanish and French bond auctions to take place later Wednesday and on Thursday.
The pound also remained vulnerable ahead of the release of the Bank of England’s quarterly inflation report, amid growing speculation that the bank may downgrade its 2011 and 2012 growth forecast.
Elsewhere, the pound was down against the euro with EUR/GBP rising 0.13%, to hit 0.8571.
Later in the day, the U.S. was to release official data on consumer price inflation and industrial production.
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