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Forex - GBP/USD extends losses ahead of Slovakia vote

Published 10/11/2011, 11:51 AM
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Investing.com - The pound extended losses against the U.S. dollar on Tuesday, as demand for riskier assets was weighed ahead of a vote by Slovakia's parliament on a plan to enhance the euro zone's bailout fund.

GBP/USD hit 1.5603 during U.S. morning trade, the daily low; the pair subsequently consolidated at 1.5597, declining 0.46%.

Cable was likely to find support at 1.5526, Monday's low and resistance at 1.5746, the high of September 21.

Slovakia was the last of the euro zone's 17 members to vote on a deal to enhance the size and powers of the EFSF, adding to pressure on the government to pass the reform.

The Slovakian finance minister said he expects the expanded rescue fund to be approved this week.

Earlier in the day, the U.K. Office for National Statistics said manufacturing production declined 0.3% in August, more than the expected 0. 1% fall, taking the annual rate of growth to 1.5%, the lowest level since February 2010.

The data came after the British Chamber of Commerce warned that the economy barely grew in the third quarter and said Britain's government must take urgent steps to stop the economy from tipping back into recession.

Last week, the Bank of England announced that it was to restart its asset purchase program, in order to stimulate growth in the ailing U.K. economy.

Elsewhere, the pound was down against the euro with EUR/GBP rising 0.48%, to trade at 0.8750.

Also Tuesday, inspectors from the European Union, International Monetary Fund and European Central Bank said in a statement that Greece will receive it next tranche of financial aid after Eurogroup and IMF officials approve the results of their review, most likely in early November.

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