Forexpros – The pound edged lower against the U.S. dollar on Tuesday, as Standard and Poor’s downgrade warnings weighed on market sentiment ahead of a key European Union summit later this week.
GBP/USD hit 1.5592 during U.S. morning trade, the daily low; the pair subsequently consolidated at 1.5621, slipping 0.18%.
Cable was likely to find support at 1.5525, the low of November 30 and resistance at 1.5725, the high of December 2.
S&P placed the euro zone’s bailout fund, the European Financial Stability Facility’s long-term AAA ratings on watch, adding that the EFSF long-term rating may be cut by 1 or 2 notches on review.
The announcement came just a day after S&P put the long-term sovereign-debt ratings of 15 euro zone members, including the six European sovereigns that guarantee the EFSF’s financial obligations, on negative watch.
But market sentiment remained supported after German Chancellor Angela Merkel said European Union leaders will take important decisions to stabilize the euro zone at a summit later this week and brushed off S&P’s downgrade warnings.
“We will take decisions on Thursday and Friday that we consider important and indispensable, and with that make a contribution to the stabilization of the euro zone,” Merkel said.
Elsewhere, sterling was down against the euro with EUR/GBP rising 0.11%, to hit 0.8573.
Earlier Tuesday, a report by the British Retail Consortium showed that retail sales posted the largest annual drop in like-for-like sales since May last month.
Meanwhile, mortgage lender Halifax also reported a 0.9% monthly fall in U.K. house prices in November, worse than the 0.1% dip expected by economists, although it said it expected the housing market to hold steady in the coming months.
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