Forexpros – The pound remained lower against the U.S. dollar on Monday, as markets were jittery ahead of a highly anticipated European Union summit later in the week, amid sustained concerns over the handling of the euro zone’s debt crisis.
GBP/USD hit 1.5539 during European afternoon trade, the pair’s lowest since June 15; the pair subsequently consolidated at 1.5551, falling 0.22%.
Cable was likely to find support at 1.5503, the low of June 13 and resistance at 1.5633, the high of June 22.
Investors remained cautious amid growing doubts over whether European leaders will make any progress towards greater fiscal integration and allowing the bloc’s rescue funds to buy government debt at a summit meeting due to begin on Thursday.
Meanwhile, fears that the debt crisis in the euro area is creating a drag on global growth continued to weigh, following a string of data last Thursday which pointed to weak U.S. manufacturing activity, a shrinking Chinese manufacturing sector and slowing business activity across the single currency bloc.
Earlier Monday, Spain’s government formally requested aid of up to EUR100 billion for its banking sector from its euro zone partners. Spain’s economy minister said the amount should be enough to cover the needs of all banks and provide an additional security buffer.
The request came after the results of an independent audit last week indicated that Madrid would need a rescue package of as much as EUR62 billion to bailout its banks.
Meanwhile, speculation over the possibility of more easing from the Bank of England continued after BoE policymaker David Miles said earlier that a “substantial” amount of monetary stimulus was needed to shore-up growth in Britain’s “stalled” economy.
In an interview with the Financial Times, Miles reiterated his support for a GBP50 billion expansion of the central bank’s asset purchase program.
Elsewhere, the pound was higher against the euro with EUR/GBP retreating 0.44%, to hit 0.8028.
Later in the day, the U.S. was to release official data on new home sales.
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