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Forex - GBP/USD weakens amid fears over Japan nuclear crisis

Published 03/16/2011, 11:47 AM
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Investing.com – The pound fell to a fresh daily low against the U.S. dollar on Wednesday, as risk sentiment was hit by concerns that Japan’s nuclear emergency was spinning out of control.

GBP/USD hit 1.6022 during European late afternoon trade, the daily low; the pair subsequently consolidated at 1.6046, shedding 0.20%.

Cable was likely to find support at 1.5977, Tuesday’s low and resistance at 1.6184, Tuesday’s high.

Japanese authorities were struggling to contain the fallout from the damaged Fukushima Daiichi nuclear plant, which was hit by the earthquake and tsunami that engulfed coastal regions of Japan on Friday.

Earlier in the day, workers withdrew briefly from the stricken power plant because of rising radiation levels and a helicopter failed to drop water onto the number 3 reactor.

Meanwhile, tensions in the Middle East were also in focus after police in Bahrain killed three protesters and wounded dozens more in the capital’s Pearl Square.

On the margins, U.S. government data released earlier showed housing starts posted their biggest decline in 27 years in February while building permits dropped to their lowest level on record.

A separate report showed that the U.S. producer-price index posted the biggest increase since June 2009 last month. Core producer prices, which exclude volatile food and energy costs, increased in line with expectations.

The pound was also higher against the euro, with EUR/GBP shedding 0.36% to hit 0.8673.

Also Wednesday, a U.K. government report showed an unexpected fall in the number of Britons claiming unemployment benefit in February but an increase in the overall unemployment rate.

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