Forex - GBP/USD trims losses, eyes on Greek debt swap

Published 03/05/2012, 07:57 AM
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Investing.com - The pound trimmed losses against the U.S. dollar on Monday, pulling back from a six-day low as positive retail sales data from the euro zone mildly improved sentiment although Greek debt concerns continued to weigh.

GBP/USD pulled back from 1.5787, the pair’s lowest since February 24, to hit 1.5833 during European afternoon trade, still down 0.02%.

Cable was likely to find support at 1.5758, the low of February 13 and resistance at 1.5879, the high of February 20.

Official data showed earlier that retail sales across the euro zone rose for the first time in five months in January.

The report came after data showing that the region’s services sector contracted at a faster rate than initially estimated in February, while investor confidence improved less-than-expected this month, remaining in negative territory for the eighth consecutive month.

Meanwhile, sentiment remained under pressure ahead of the March 8 deadline for Greece’s private creditors to join the agreement under which they will exchange their existing Greek holdings for new government bonds in a debt swap deal.

A failure to agree on the swap would put the country back on the brink of a messy sovereign debt default.

In the U.K. earlier, data showed that the service sector expanded in February, albeit at a slower than expected pace, fuelling hopes that the economy will avoid slipping into a recession in the first quarter.

The Markit/CIPS Services Purchasing Managers Index declined by 2.2 points to 53.8, from a reading of 56.0 in January. Analysts had expected a reading of 55.0 in February.

Elsewhere, sterling was lower against the euro with EUR/GBP adding 0.06%, to hit 0.8342.

Later in the day, the U.S. was to produce government data on factory orders, while the Institute of Supply Management was to release a report on service sector growth.


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