Forex - GBP/USD pushes lower, eyes on Greece talks

Published 02/07/2012, 07:55 AM
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Investing.com - The pound pushed lower against the U.S. dollar on Tuesday, as uncertainty over Greece’s ability to reach a consensus on bailout terms and avoid a sovereign debt default weighed on demand for riskier assets.

GBP/USD hit 1.5792 during European afternoon trade, the daily low; the pair subsequently consolidated at 1.5803, shedding 0.11%.

Cable was likely to find support at 1.5753, the low of October 21 and resistance at 1.5851, the high of October 14.

Greek Prime Minister Lucas Papademos was due to hold talks with coalition leaders later Tuesday to discuss what conditions they are prepared to accept, after postponing talks on Monday and failing to finalize an agreement over the weekend.

Earlier Tuesday, Eurogroup President Jean-Claude Juncker said he was confident Greece would remain in the single currency bloc, provided that the country fulfilled its obligations to other bloc members.

Sentiment was also hit after the German finance ministry said earlier that industrial production dropped by 2.9% in December, disappointing expectations for a modest 0.1% decline.

The weak data sparked fresh concerns over the impact of the debt crisis in the euro zone on the region’s largest economy.

Meanwhile, the pound was fractionally lower against the euro with EUR/GBP edging 0.05% lower, to hit 0.8293.

Also Tuesday, a report by the British Retail Consortium showed earlier that U.K. retail sales fell 0.3% on the year in January, after a 2.2% jump the previous month, as shoppers cut back on spending after heavy discounts boosted sales in the run up to Christmas.

Later in the day, Federal Reserve Chairman Ben Bernanke was due to testify on the economic outlook and federal budget situation before the Senate Budget Committee in Washington.


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