Investing.com - The pound pushed lower against the U.S. dollar on Thursday, as renewed concerns over the outlook for growth in the euro zone dampened risk sentiment, shrugging off successful results at a U.K. government bond auction earlier in the day.
GBP/USD hit 1.5739 during European afternoon trade, the pair’s lowest since June 8; the pair subsequently consolidated at 1.5444, declining 0.38%.
Cable was likely to find support at 1.5371, the low of June 6 and resistance at 1.5515, the day’s high.
Sterling found brief support earlier, after the U.K. saw borrowing costs fall to a record low at an auction of 10-year government bonds, as investors piled in to safe haven assets amid growing fears over the global economic outlook.
The U.K.’s Debt Management Office sold the full targeted amount of GBP3.5 billion worth of 10-year government bonds at an average yield of 1.71% earlier in the day, the lowest yield on record and down from 1.92% at a similar auction last month.
But market sentiment remained under pressure after the European Central Bank’s monthly bulletin reiterated that downside risks have materialized and that growth in the region will remain weak.
Investors were also cautious after Spanish Prime Minister Mariano Rajoy announced on Wednesday EUR65 billion of new austerity measures, in an effort to meet new budget-deficit targets agreed with euro zone partners.
Market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
Meanwhile, the dollar remained supported after the Fed said in the minutes of its June policy meeting that the U.S. economy would have to worsen further before the central bank implements additional easing measures.
Elsewhere, the pound was trading close to a three-and-a-half year high against the euro with EUR/GBP falling 0.13%, to hit 0.7885.
Also Thursday, official data showed that industrial production in the euro zone rose for the first time in three months in May, increasing by 0.6%. Analysts had expected a modest 0.1% decline.
Later in the day, the U.S. was to release government data on unemployment claims and official data on import prices.
GBP/USD hit 1.5739 during European afternoon trade, the pair’s lowest since June 8; the pair subsequently consolidated at 1.5444, declining 0.38%.
Cable was likely to find support at 1.5371, the low of June 6 and resistance at 1.5515, the day’s high.
Sterling found brief support earlier, after the U.K. saw borrowing costs fall to a record low at an auction of 10-year government bonds, as investors piled in to safe haven assets amid growing fears over the global economic outlook.
The U.K.’s Debt Management Office sold the full targeted amount of GBP3.5 billion worth of 10-year government bonds at an average yield of 1.71% earlier in the day, the lowest yield on record and down from 1.92% at a similar auction last month.
But market sentiment remained under pressure after the European Central Bank’s monthly bulletin reiterated that downside risks have materialized and that growth in the region will remain weak.
Investors were also cautious after Spanish Prime Minister Mariano Rajoy announced on Wednesday EUR65 billion of new austerity measures, in an effort to meet new budget-deficit targets agreed with euro zone partners.
Market analysts warned that the fresh austerity measures were likely to drag Spain’s economy deeper in to a recession.
Meanwhile, the dollar remained supported after the Fed said in the minutes of its June policy meeting that the U.S. economy would have to worsen further before the central bank implements additional easing measures.
Elsewhere, the pound was trading close to a three-and-a-half year high against the euro with EUR/GBP falling 0.13%, to hit 0.7885.
Also Thursday, official data showed that industrial production in the euro zone rose for the first time in three months in May, increasing by 0.6%. Analysts had expected a modest 0.1% decline.
Later in the day, the U.S. was to release government data on unemployment claims and official data on import prices.