Pound low against dollar before bailout meeting

As eurozone finance minister met in Brussels yesterday to discuss another bailout for Greece, the pound remained low against the dollar. Before consolidating at 1.5612, GBP/USD hit 1.5608 ,there lowest since January 25.

Cable was likely to find resistance at the high of December 23, 1.5707, and support at the low of January 4, 1.5578.

According to Forex-rateit.com, as finance ministers prepared to give approval for another EUR130 billion bailout for Greece, consumer confidence weakened. After Spanish Prime Minister Mariano Rajoy announced that he would cut his country’s public deficit by 5.8 per cent rather than the planned 4.4 per cent earlier this month, it is also thought that Spain was discussed at the meeting.

In the meantime, the US dollar was supported by positive employment data from the country on Friday, which reduced the likelihood of the Federal Reserve engaging in a new round of asset purchases to stimulate growth. American companies created 227,000 jobs last month, beating expectations of 210,000, according to the Department of Labor. The unemployment rate was also at a three-year-low of 8.3 per cent.

EUR/GBP hit 0.8407, a rise of 0.42 per cent, with the sterling lowest against the euro.