Forex - GBP/USD trims losses as U.K. bank fears ease

Published 11/23/2010, 07:59 AM
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Investing.com – The pound trimmed losses against the U.S. dollar on Tuesday, retreating from a 4-day low after the chairman of the U.K Financial Services Authority said that U.K. banks exposure to Irish debt was “not worrying”.

GBP/USD hit 1.5949 after retreating from 1.5891, the pair’s lowest since November 17 during European afternoon trade, shedding 0.05%.

Cable was likely to find support at 1.5721, the low of October 28 and resistance at 1.6083, Monday’s high.

Earlier in the day, Adair Turner, chairman of the U.K. FSA said that it was “broadly speaking not the case” that British banks were heavily exposed in Ireland, which on Sunday requested emergency aid from the European Union and the International Monetary Fund to shore up public finances.

Turner said that the biggest Irish risk to U.K. banks stemmed from the decline in the Irish economy. U.K. banks’ holdings of Irish bonds are “not at all worrying” and their exposure to Irish lenders was “not out of line with what you would expect.”

Separately, industry data released earlier in the day showed that U.K. mortgage approvals fell to their lowest level since March 2009 in October, while gross mortgage lending fell to its lowest level since 2001.

Meanwhile, the pound was up against the euro, with EUR/GBP shedding 0.60% to hit 0.8487.

Later Tuesday, the U.S. was to publish revised figures on third quarter GDP as well as data on existing home sales and manufacturing. In addition, the Federal Reserve was to publish the minutes of its November monetary policy meeting.


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