Forexpros – The pound slipped against the U.S. dollar on Thursday, tracking the euro lower as concerns over the deepening debt crisis in the euro zone weighed on market sentiment after the previous days risk rally.
GBP/USD hit 1.5638 during European morning trade, the daily low; the pair subsequently consolidated at 1.5679, slipping 0.13%.
Cable was likely to find support at 1.5525, Wednesday’s low and resistance at 1.5779, Wednesday’s high and a seven-day high.
European Central Bank President Mario Draghi said earlier that downside risks to Europe’s economic outlook have increased.
The comments came as Spain was due to auction up to EUR3.75 billion of government debt later Thursday.
The pound rallied on Wednesday, after six major central banks, including the Federal Reserve and the Bank of England agreed to lower dollar swap rates to prevent a lack of liquidity in the global financial system.
In addition, China cut banks’ reserve-ratio requirements in an effort to boost liquidity and support the world’s second largest economy amid global market turmoil.
Earlier Thursday, official data showed that Chinese manufacturing activity contracted in November for the first time in nearly three years as export orders fell sharply.
The pound was also lower against the euro, with EUR/GBP rising 0.18% to hit 0.8579.
Later in the day, the U.K. was to publish a report on manufacturing activity, while the U.S. was to release its weekly report on initial jobless claims and the Institute of Supply Management was to release data on manufacturing activity.
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