Forexpros – The pound remained lower against the U.S. dollar on Wednesday, hovering close to a two-month low as investors turned to a highly anticipated European Union summit amid sustained fears over a possible Greek exit from the euro zone.
GBP/USD hit 1.5679 during U.S. morning trade, the pair’s lowest since March 15; the pair subsequently consolidated at 1.5699, shedding 0.39%.
Cable was likely to find support at 1.5633, the low of March 15 and resistance at 1.5770, the session high.
Markets were jittery ahead of the EU summit, amid concerns over a division between France’s new President Francois Hollande, who favors measures designed to support growth and pro-austerity Germany.
Sentiment broadly weakened earlier, after former Greek Prime Minister Lucas Papademos said late Tuesday that Greece had no choice but to stick with a painful austerity program or face a damaging exit from the euro zone, a risk he said was unlikely to materialize but was real.
Sterling remained under pressure after the U.K. Office for National Statistics said that retail sales fell 2.3% in April, dropping at the sharpest rate since January 2010 and missing expectations for a 0.8% decline.
Retail sales for March were revised up to a 2.0% gain from a previously reported 1.8% increase.
The weak data added to speculation over the possibility of fresh monetary easing from the Bank of England.
The report came after the minutes of the BoE’s May meeting showed that policymakers considered more monetary stimulus, amid concerns over the risk to the U.K. economic recovery arising from the euro zone crisis.
In the U.S., the Census Bureau said new home sales rose by 3.3% to a seasonally adjusted 343,000 units in April, above expectations for a gain of 2.1% to 335,000.
New home sales for March were revised up to 332,000 units from a previously reported 328,000 units.
Elsewhere, the pound was higher against the euro with EUR/GBP retreating 0.37%, to hit 0.8017.
Also Wednesday, the Confederation of British Industry said that its index of industrial order expectations declined to minus 17.0 in May from April’s reading of minus 8.0, adding to concerns over the health of the U.K.’s economy
Analysts had expected the index to decline by 2.0 points to minus 10.0 in May.
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