Investing.com - The pound fell to a two-month low against the U.S. dollar on Thursday, as sterling came under pressure following the release of disappointing U.K. retail sales data.
GBP/USD hit 1.5825 during European afternoon trade, the lowest level since September 5; the pair subsequently consolidated at 1.5835, shedding 0.04%.
Cable was likely to find support at 1.5778, the low of August 31 and resistance at 1.5915, the high of November 12.
The pound came under pressure after official data showed that retail sales in the U.K. fell by a seasonally adjusted 0.8% in October, compared to expectations for a 0.1% fall.
Retail sales for September were revised down to a 0.5% gain from a previously reported increase of 0.6%.
Meanwhile, investors remained concerned over 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.
There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise before the January 1 deadline.
President Barack Obama is set to meet with congressional leaders on Friday to discuss the country’s fiscal situation.
Traders looked ahead to the release of a flurry of U.S. economic data later in the day. The country was to release reports on initial jobless claims and consumer price inflation, in addition to data on manufacturing activity in New York and Philadelphia.
A speech by Federal Reserve Chairman Ben Bernanke was to be closely watched for any indications on the future possible direction of monetary policy.
Sterling was also lower against the euro with EUR/GBP adding 0.23%, to hit 0.8059.
In the euro zone, official data released earlier showed that the region’s economy shrank 0.1% in the third quarter, following a contraction of 0.2% in the preceding quarter. A technical recession is defined as two straight quarters of contraction.
Year-on-year, euro zone gross domestic product fell 0.6% compared to a year earlier after contracting at a rate of 0.5% in the previous quarter.
The data came after reports showed that the pace of Germany's economic growth slowed to 0.2% in the third quarter from a 0.3% increase in the previous quarter, while France's economy’s expanded 0.2%, following contraction of 0.1% in the previous quarter.
Data also showed Spain's economy contracted 0.3%, while Italy’s economy shrank 0.2% in the third quarter.
Concerns over the health of triple-AAA Austria and the Netherlands intensified after data showed Austria’s economy shrank 0.1% in the three months to September, while the Dutch economy contracted by an alarming 1.1%. Economists had only expected a decline of 0.2%.
GBP/USD hit 1.5825 during European afternoon trade, the lowest level since September 5; the pair subsequently consolidated at 1.5835, shedding 0.04%.
Cable was likely to find support at 1.5778, the low of August 31 and resistance at 1.5915, the high of November 12.
The pound came under pressure after official data showed that retail sales in the U.K. fell by a seasonally adjusted 0.8% in October, compared to expectations for a 0.1% fall.
Retail sales for September were revised down to a 0.5% gain from a previously reported increase of 0.6%.
Meanwhile, investors remained concerned over 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.
There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise before the January 1 deadline.
President Barack Obama is set to meet with congressional leaders on Friday to discuss the country’s fiscal situation.
Traders looked ahead to the release of a flurry of U.S. economic data later in the day. The country was to release reports on initial jobless claims and consumer price inflation, in addition to data on manufacturing activity in New York and Philadelphia.
A speech by Federal Reserve Chairman Ben Bernanke was to be closely watched for any indications on the future possible direction of monetary policy.
Sterling was also lower against the euro with EUR/GBP adding 0.23%, to hit 0.8059.
In the euro zone, official data released earlier showed that the region’s economy shrank 0.1% in the third quarter, following a contraction of 0.2% in the preceding quarter. A technical recession is defined as two straight quarters of contraction.
Year-on-year, euro zone gross domestic product fell 0.6% compared to a year earlier after contracting at a rate of 0.5% in the previous quarter.
The data came after reports showed that the pace of Germany's economic growth slowed to 0.2% in the third quarter from a 0.3% increase in the previous quarter, while France's economy’s expanded 0.2%, following contraction of 0.1% in the previous quarter.
Data also showed Spain's economy contracted 0.3%, while Italy’s economy shrank 0.2% in the third quarter.
Concerns over the health of triple-AAA Austria and the Netherlands intensified after data showed Austria’s economy shrank 0.1% in the three months to September, while the Dutch economy contracted by an alarming 1.1%. Economists had only expected a decline of 0.2%.