Forexpros – The pound was lower against the U.S. dollar on Monday, as investor appetite for riskier currencies was hit by a combination of concerns over the outlook for global growth and the ongoing crisis in the euro zone.
GBP/USD hit 1.5541 during European morning trade, the pair’s lowest since June 15; the pair subsequently consolidated at 1.5542, sliding 0.27%.
Cable was likely to find support at 1.5452, the low of June 12 and resistance at 1.5633, Friday’s high.
Concerns that the debt crisis in Europe is creating a drag on global growth weighed, following a string of data late last week which pointed to weak U.S. manufacturing activity, a shrinking Chinese manufacturing sector and slowing business activity across the single currency bloc.
Investors also remained cautious ahead of a European Union summit due to begin later in the week, amid hopes for progress on greater fiscal integration and allowing the bloc’s rescue funds to buy government debt.
Meanwhile, speculation over the possibility of more easing from the Bank of England continued after BoE policymaker David Miles said earlier that a “substantial” amount of monetary stimulus was needed to shore-up growth in Britain’s “stalled” economy.
In an interview with the Financial Times, Miles reiterated his support for a GBP50 billion expansion of the central bank’s asset purchase program.
The pound was higher against the euro, with EUR/GBP shedding 0.35% to hit 0.8035.
Spain’s government was expected to make a formal request for aid for its banking sector later in the day, after reports on Thursday indicated that Madrid would need a rescue package of as much as EUR62 billion.
In addition, the U.S. was to release official data on new home sales.
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