Forexpros – The pound remained lower against the U.S. dollar on Wednesday, as growing fears that this week’s highly anticipated European Union summit will result in no new steps to tackle the region’s sovereign debt crisis continued to weigh on market sentiment.
GBP/USD hit 1.5610 during European afternoon trade, the session low; the pair subsequently consolidated at 1.5616, shedding 0.17%.
Cable was likely to find support at 1.5537, the low of June 25 and resistance at 1.5698, the high of May 25.
Investors remained cautious ahead of the EU summit on Thursday and Friday amid growing doubts that leaders would make progress on greater fiscal integration and allowing the bloc’s rescue funds to buy government debt.
Sentiment on the pound was weighed by mounting speculation that the Bank of England will implement fresh quantitative easing measures to shore up growth.
On Tuesday, BoE governor Mervyn King the outlook for the U.K. economy had deteriorated in recent weeks as a result of the ongoing euro zone crisis, and added that an interest rate cut would be less effective in stimulating the economy than more easing.
Meanwhile, industry data showed earlier that an index of realized sales in the U.K. rose unexpectedly to 42 in June from a reading of 21 the previous month. Analysts had expected the index to fall to 12 in June.
A separate report showed that U.K. mortgage approvals fell to 30,200 in May, the lowest level since April 2011, from 32,100 the previous month.
Analysts had expected mortgage approvals to rise to 32.8K in May.
Elsewhere, the pound was lower against the euro with EUR/GBP adding 0.16%, to hit 0.8000.
Also Wednesday, Italy saw borrowing costs climb to the highest level since December at an auction of six-month government bonds.
Italy’s Treasury sold the full targeted amount of EUR9 billion of six-month government bonds at an average yield of 2.95%, up from 2.10% at a similar auction last month.
Later in the day, Germany was to produce preliminary data on consumer price inflation. The U.S. was to publish official data on durable goods orders, as well as industry data on pending home sales.
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