Investing.com - The pound erased gains against the U.S. dollar on Tuesday, pulling away from a three-day high as concerns over the handling of the euro zone’s debt crisis overshadowed upbeat U.K. retail data.
GBP/USD pulled back from 1.5716, the pair’s highest since May 24, to hit 1.5671 during European afternoon trade, edging down 0.06%.
Cable was likely to find support at 1.5629, the low of May 25 and resistance at 1.5725, the high of May 24.
The pound found support after data showed that retail sale volumes in the U.K. increased significantly in May and sentiment regarding the business situation for the next quarter improved.
In a report, the Confederation of British Industry said that its index of retail sales jumped to 21 in May from minus 6 the previous month, beating expectations for a reading of minus 7 and turning positive for the first time since November 2011.
Sentiment also strengthened earlier on reports China may soon launch an economic stimulus program, to counter signs of a slowdown in growth in the world’s second largest economy.
But investors remained cautious after Ewald Nowotny, a member of the European Central Bank’s governing council, said the bank has not discussed restarting its bond purchasing program.
Markets were also jittery amid growing concerns over the situation in Spain, where rising bond yields, the growing costs of bank rescues and a recession hit economy fuelled fears that Madrid will be forced to seek an international bailout.
The yield on Spanish 10-year bonds eased back to 6.44% earlier, after hitting 6.50% on Monday, the 2012 high, after the government announced that it was to recapitalize one of the country’s largest commercial lenders Bankia.
Elsewhere, the pound was steady against the euro with EUR/GBP easing 0.07%, to hit 0.7991.
Also Tuesday, Spain’s Treasury auctioned EUR8.5 billion of six-month bonds at an average yield of 2.10%, a six-month high, up from 1.77% at a similar auction last month.
Later in the day, Germany was to release preliminary data on consumer price inflation, while the U.S. was to release reports on house price inflation and consumer confidence.
GBP/USD pulled back from 1.5716, the pair’s highest since May 24, to hit 1.5671 during European afternoon trade, edging down 0.06%.
Cable was likely to find support at 1.5629, the low of May 25 and resistance at 1.5725, the high of May 24.
The pound found support after data showed that retail sale volumes in the U.K. increased significantly in May and sentiment regarding the business situation for the next quarter improved.
In a report, the Confederation of British Industry said that its index of retail sales jumped to 21 in May from minus 6 the previous month, beating expectations for a reading of minus 7 and turning positive for the first time since November 2011.
Sentiment also strengthened earlier on reports China may soon launch an economic stimulus program, to counter signs of a slowdown in growth in the world’s second largest economy.
But investors remained cautious after Ewald Nowotny, a member of the European Central Bank’s governing council, said the bank has not discussed restarting its bond purchasing program.
Markets were also jittery amid growing concerns over the situation in Spain, where rising bond yields, the growing costs of bank rescues and a recession hit economy fuelled fears that Madrid will be forced to seek an international bailout.
The yield on Spanish 10-year bonds eased back to 6.44% earlier, after hitting 6.50% on Monday, the 2012 high, after the government announced that it was to recapitalize one of the country’s largest commercial lenders Bankia.
Elsewhere, the pound was steady against the euro with EUR/GBP easing 0.07%, to hit 0.7991.
Also Tuesday, Spain’s Treasury auctioned EUR8.5 billion of six-month bonds at an average yield of 2.10%, a six-month high, up from 1.77% at a similar auction last month.
Later in the day, Germany was to release preliminary data on consumer price inflation, while the U.S. was to release reports on house price inflation and consumer confidence.