Forexpros – The pound extended losses against the U.S. dollar on Monday, shrugging off better-than-expected U.S. home sales data as market sentiment remained weak amid concerns over European and U.S. sovereign debt.
GBP/USD hit 1.5613 during U.S. morning trade, the pair’s lowest since October 12; the pair subsequently consolidated at 1.5619, plummeting 1.17%.
The pair was likely to find support at 1.5541, the low of October 12 and resistance at 1.5826, the high of November 16.
In a report, the National Association of Realtors said that U.S. existing home sales rose more-than-expected in October to 4.97M, from 4.90M the previous month.
Analysts had expected existing home sales to rise to 4.80M in October.
Earlier in the day, the spread between 10-year Spanish bond yields and their German counterparts widened amid uncertainty over the ability of Madrid’s newly elected government to deal with its economic problems.
Also Monday, rating’s agency Moody’s said a rise in French government debt yields and weaker growth prospects could be negative for the outlook on the country’s credit rating.
Meanwhile, the failure of a U.S. congressional “super committee” to agree on a package of measures to slash USD1.2 trillion off the U.S. deficit over the next 10 years weighed on risk appetite. A formal announcement was expected later in the day.
The pound was also weighed by concerns over fresh monetary easing measures after a senior Bank of England policymaker said last week that there was a “very strong case” for extending the central bank’s asset purchase program next year.
Elsewhere, the pound was also sharply lower against the euro with EUR/GBP rising 0.69%, to hit 0.8617.
Earlier Monday, a report by British property website Rightmove showed that house price inflation fell 3.1% in November after a 2.8% rise the previous month.
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