Forexpros – The pound slipped to a four-day low against the U.S. dollar on Monday, as fears that the debt crisis in the euro zone is worsening saw investors favor the relative safety of the greenback over higher-yielding assets.
GBP/USD hit 1.5819 during European morning trade, the pair’s lowest since April 10; the pair subsequently consolidated at 1.5828, slipping 0.10%.
Cable was likely to find short-term support at 1.5808, the low of April 4 and resistance at 1.5860, the session high.
The cost of insuring Spanish sovereign debt against default rose to a fresh record earlier, pushing the yield on the country’s 10-year bonds back above the 6% level, amid concerns that the country will be unable to meet deficit reduction targets.
Market sentiment looked set to remain cautious ahead of an auction of two and 10-year Spanish governments bonds later in the week, which was being seen as a key test of market appetite for the country’s debt.
The pound remained supported after some recent economic data indicated that the recovery in the U.K. is gaining momentum, easing concerns the Bank of England may implement fresh stimulus measures.
Earlier in the day, industry data showed that U.K. house prices climbed to a record high in April, as a lack of fresh properties on the market bolstered asking prices.
The U.K.’s largest property website Rightmove said asking prices increased by 2.9% to reach an all-time high of GBP243,737 this month, beating the previous record set in May 2008 by 0.5%.
However, the report said that the increase in asking prices was less than retail price inflation over the same period.
The pound was trading close to a 19-month peak against the broadly weaker euro, with EUR/GBP shedding 0.42% to hit 0.8216.
Later Monday, the U.S. was to release government data on retail sales and a report on manufacturing activity in New York, as well as official data on net long-term securities transactions and business inventories.
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