Forexpros – The pound slipped lower against the U.S. dollar on Wednesday, as ongoing concerns over political uncertainty in Italy and Greece weighed on demand for riskier assets.
GBP/USD hit 1.6064 during European morning trade, the session low; the pair subsequently consolidated at 1.6065, slipping 0.14%.
Cable was likely to find support at 1.5979, the low of November 4 and short-term resistance at 1.6129, Tuesday’s high.
Late Tuesday, Italian Prime Minister Silvio Berlusconi announced that he would step down after parliament approves next year’s budget. The announcement came after Mr. Berlusconi lost his parliamentary majority during a vote on a budget bill.
But uncertainty over whether Italy’s new government will be able to shore up growth and implement austerity measures to help the country survive its debt crisis dented risk appetite.
In Greece, outgoing Prime Minister George Papandreou was widely expected to name former European Central Bank Vice President Lucas Papademos as prime minister of an interim government later in the day.
The pound remained supported after government data showed that China’s annualized rate of consumer price inflation came in broadly in line with expectations in October, slowing to 5.5%, after a 6.1% increase the previous month, easing fears over monetary tightening by Beijing.
Meanwhile, the pound was higher against the euro, with EUR/GBP shedding 0.29% to hit 0.8572.
Later in the day, the U.K. was to produce official data on the trade balance, while in the U.S. Federal Reserve Chairman Ben Bernanke was to speak.
Forexpros
