Investing.com - The pound erased losses against the U.S. dollar on Monday, after data showing the third consecutive monthly decline in U.S. retail sales fuelled speculation that the Federal Reserve will act to shore up economic growth.
GBP/USD pulled back from 1.5518, the session low, to hit 1.5610 during U.S. morning trade, gaining 0.22%.
Cable was likely to find support at 1.5516, the session low and resistance at 1.5691, the high of July 4.
The Commerce Department said U.S. retail sales fell by a seasonally adjusted 0.5% in June, confounding expectations for a 0.2% increase, after a 0.2% drop in May.
It was the first time retail sales had dropped in three consecutive months since late 2008.
Core retail sales, which exclude automobile sales, declined for the second consecutive month, dropping 0.4%, against expectations for an increase of 0.1%, after falling by 0.4% in May.
The data fuelled speculation over the possibility of another round of easing from the Federal Reserve, ahead of Fed Chairman Ben Bernanke's testimony on the economic outlook to the U.S. Senate on Tuesday and Wednesday.
In June, Bernanke said the U.S. central bank remained prepared to take additional steps to support economic growth if necessary, including additional asset purchases.
The greenback shrugged off a report showing that the New York Federal Reserve’s index of manufacturing conditions improved more-than-expected in July, as the employment index inched up.
The New York Fed said that its general business conditions index rose to 7.4 in July from 2.3 the previous month, outstripping expectations for a reading of 4.0.
Elsewhere, the International Monetary Fund said that the outlook for growth in the U.K. had deteriorated more than any other G8 nation over the past three months, when it released its forecasts for global growth earlier.
The IMF said it now expected the U.K. economy to expand by just 0.2% this year, down from 0.8% in April and by 1.4% in 2013.
For the global economy the IMF now expects growth of 3.5% in 2012, down from a forecast of 3.6% three months ago and revised down its outlook for growth next year to 3.9% from a previous forecast of 4.1%.
The pound was trading close to a three-and-a-half year low against the euro, with EUR/GBP down 0.31% to 0.7839.
The euro remained under pressure amid uncertainty over whether some bondholders could be forced to accept losses under the terms of Spain's bank bailout.
Meanwhile, Germany’s constitutional court announced that it will deliver a ruling on whether the euro zone’s permanent bailout fund contravenes the German constitution on September 12, disappointing hopes for an earlier decision.
GBP/USD pulled back from 1.5518, the session low, to hit 1.5610 during U.S. morning trade, gaining 0.22%.
Cable was likely to find support at 1.5516, the session low and resistance at 1.5691, the high of July 4.
The Commerce Department said U.S. retail sales fell by a seasonally adjusted 0.5% in June, confounding expectations for a 0.2% increase, after a 0.2% drop in May.
It was the first time retail sales had dropped in three consecutive months since late 2008.
Core retail sales, which exclude automobile sales, declined for the second consecutive month, dropping 0.4%, against expectations for an increase of 0.1%, after falling by 0.4% in May.
The data fuelled speculation over the possibility of another round of easing from the Federal Reserve, ahead of Fed Chairman Ben Bernanke's testimony on the economic outlook to the U.S. Senate on Tuesday and Wednesday.
In June, Bernanke said the U.S. central bank remained prepared to take additional steps to support economic growth if necessary, including additional asset purchases.
The greenback shrugged off a report showing that the New York Federal Reserve’s index of manufacturing conditions improved more-than-expected in July, as the employment index inched up.
The New York Fed said that its general business conditions index rose to 7.4 in July from 2.3 the previous month, outstripping expectations for a reading of 4.0.
Elsewhere, the International Monetary Fund said that the outlook for growth in the U.K. had deteriorated more than any other G8 nation over the past three months, when it released its forecasts for global growth earlier.
The IMF said it now expected the U.K. economy to expand by just 0.2% this year, down from 0.8% in April and by 1.4% in 2013.
For the global economy the IMF now expects growth of 3.5% in 2012, down from a forecast of 3.6% three months ago and revised down its outlook for growth next year to 3.9% from a previous forecast of 4.1%.
The pound was trading close to a three-and-a-half year low against the euro, with EUR/GBP down 0.31% to 0.7839.
The euro remained under pressure amid uncertainty over whether some bondholders could be forced to accept losses under the terms of Spain's bank bailout.
Meanwhile, Germany’s constitutional court announced that it will deliver a ruling on whether the euro zone’s permanent bailout fund contravenes the German constitution on September 12, disappointing hopes for an earlier decision.