Investing.com - The pound dipped lower against the U.S. dollar on Thursday, as investors eyed the outcome of an Italian government debt auction, amid mounting concerns over sovereign debt contagion in the euro zone.
GBP/USD hit 1.5473 during European morning trade, the pair’s lowest since Tuesday; the pair subsequently consolidated at 1.5489, slipping 0.11%.
Cable was likely to find support at 1.5403, the low of June 8 and resistance at 1.5597, Wednesday’s high.
Italy was due to auction as much as EUR4.5 billion of government bonds later Thursday, just one day after a bond sale which saw the country’s one-year borrowing costs surge to the highest level since December.
The yield on Italian 10-year government bonds was at 6.27% ahead of the auction, while the yield on Spanish 10-year bonds ticked up to 6.84%, hovering just below the critical 7% threshold, which is widely considered unsustainable in the long term.
On Wednesday, ratings agency Moody’s cut Spain’s credit rating by three notches to just above junk status and warned that further cuts were possible, fuelling fears over the crisis in the country’s banking sector.
Investors were also focused on the outcome of Sunday’s closely watched general election in Greece, amid fears that a win for anti-bailout parties could precipitate a Greek exit from the euro zone.
The pound was lower against the euro, with EUR/GBP gaining 0.22% to hit 0.8115.
Later Thursday, the U.S. was to produce official data on consumer price inflation and initial unemployment claims.
GBP/USD hit 1.5473 during European morning trade, the pair’s lowest since Tuesday; the pair subsequently consolidated at 1.5489, slipping 0.11%.
Cable was likely to find support at 1.5403, the low of June 8 and resistance at 1.5597, Wednesday’s high.
Italy was due to auction as much as EUR4.5 billion of government bonds later Thursday, just one day after a bond sale which saw the country’s one-year borrowing costs surge to the highest level since December.
The yield on Italian 10-year government bonds was at 6.27% ahead of the auction, while the yield on Spanish 10-year bonds ticked up to 6.84%, hovering just below the critical 7% threshold, which is widely considered unsustainable in the long term.
On Wednesday, ratings agency Moody’s cut Spain’s credit rating by three notches to just above junk status and warned that further cuts were possible, fuelling fears over the crisis in the country’s banking sector.
Investors were also focused on the outcome of Sunday’s closely watched general election in Greece, amid fears that a win for anti-bailout parties could precipitate a Greek exit from the euro zone.
The pound was lower against the euro, with EUR/GBP gaining 0.22% to hit 0.8115.
Later Thursday, the U.S. was to produce official data on consumer price inflation and initial unemployment claims.