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Forex - GBP/USD extends losses in risk off-trade

Published 11/28/2012, 07:40 AM
Updated 11/28/2012, 07:42 AM
GBP/USD
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EUR/GBP
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Investing.com - The pound extended losses against the U.S. dollar on Wednesday, as market sentiment remained under pressure amid uncertainty over Greece's ability to meet its new debt target, while U.S. fiscal policy worries continued to weigh.

GBP/USD hit 1.5982 during European afternoon trade, the pair's lowest since November 23; the pair subsequently consolidated at 1.5986, falling 0.22%.

Cable was likely to find support at 1.5928, the low of November 23 and resistance at 1.6086, the high of October 30.

While international lenders agreed on a plan to cut Greek debt, which will allow the country to secure more financial aid and avoid a default, market scepticism grew over a lack of detail on how Athens will implement the reforms needed to meet its new targets.

Elsewhere, investors continued to monitor developments surrounding the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.

Sentiment weakened on Tuesday after Senate Majority Leader Harry Reid said he was frustrated by the lack of progress in talks over the U.S. budget impasse in Washington.

The pound was higher against the euro with EUR/GBP edging down 0.14%, to hit 0.8067.

Later in the day, the U.S. was to release official data on new home sales, as well as government data on crude oil inventories.

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