Forexpros – The pound remained lower against the U.S. dollar on Tuesday, as concerns over the outlook for the global economy and worries about rising borrowing costs in the periphery of the euro zone supported safe haven demand.
GBP/USD hit 1.5810 during European afternoon trade, the session low; the pair subsequently consolidated at 1.5855, sliding 0.22%.
Cable was likely to find short-term support at 1.5804, the low of April 5 and resistance at 1.5930, the session high and a one-week high.
Concerns over high Spanish borrowing costs mounted, as the yield on Spain’s 10-year government bonds ticked up to 5.9% from 5.8% earlier, amid fears that the country will be the next in the euro zone to require a bailout.
The increase came in spite of reassurances form Spanish Prime Minister Mariano Rajoy earlier that the country will cut its budget deficit to 3% of gross domestic product in 2013.
Meanwhile, Friday’s weaker-than-forecast U.S. employment data continued to cast doubts over the strength of the country’s economic recovery and fuelled expectations that the Federal Reserve could conduct a fresh round of quantitative easing.
But the pound found some support after industry data showed that U.K. house prices declined at the slowest pace since June 2010 in March.
The Royal Institution of Chartered Surveyors’ seasonally adjusted house price balance rose to minus 10 from minus 13 in February, beating forecasts for a more modest rise to minus 12.
The report came after robust data on the manufacturing, construction and service sectors last week eased concerns over a possible recession in the U.K.
The pound was lower against the euro, with EUR/GBP rising 0.29% to hit 0.8271.
Also Tuesday, official data showed that French industrial production rose by 0.3% in February, slightly more than expectations for a 0.2% increase, easing concerns over the economic outlook for the euro zone’s second largest economy.
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