Forexpros – The pound tumbled to an eight-day low against the U.S. dollar on Monday, tracking the euro’s losses as renewed concerns over the handling of the euro zone’s debt crisis weighed on risk sentiment.
GBP/USD hit 1.5554 during European morning trade, the pair’s lowest since November 30; the pair subsequently consolidated at 1.5558, dropping 0.71%.
Cable was likely to find support at 1.5484, the low of November 24 and resistance at 1.5725, the high of December 2.
All European Union countries except the U.K. agreed on Friday to pursue stricter budget rules and to provide up to 200 billion euros in loans to the International Monetary Fund to help tackle the region’s financial crisis.
U.K. Prime Minister David Cameron vetoed changes to the treaty after failing to secure concessions, meaning new fiscal rules will have to operate as an intergovernmental agreement.
Meanwhile, markets remained cautious as the new fiscal union was not viewed as the decisive move needed to resolve the euro zone’s debt woes.
Investors were also jittery after Standard &Poor’s placed the credit ratings of 15 euro zone members, including France, Germany, Italy and Spain on negative watch and said it would announce any ratings changes “as soon as possible” after Friday’s meeting.
Elsewhere, sterling was lower against the euro with EUR/GBP advancing 0.10%, to hit 0.8551.
Later in the day, the U.S. was to publish official data on the federal budget balance.
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