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Forex - GBP/USD extends losses in risk-off trade

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Investing.com - The pound extended losses against the U.S. dollar on Tuesday, as concerns over the outlook for growth in the euro zone weighed on demand for risk-related assets.

GBP/USD hit 1.6044 during U.S. morning trade, the session low; the pair subsequently consolidated at 1.6039, dropping 0.47%.

Cable was likely to find support at 1.6010, the low of January 4 and resistance at 1.6128, the day's high.

Market sentiment came under pressure after official data showed that German factory orders fell 1.8% in November, compared to expectations for a 1.4% decline as overseas demand dropped.

Meanwhile, Eurostat said the unemployment rate in the euro zone hit a new record high of 11.8% in November, up from 11.7% in October, underlining concerns over the outlook for growth in the region.

A separate report showed that euro zone retail sales increased 0.1% in November, compared to expectations for a 0.3% rise.

Investor confidence remained somewhat supported after Japanese Finance Minister Taro Aso said Tuesday that his government would buy bonds issued by the European Stability Mechanism, the euro zone's permanent bailout fund, in order to help stabilize the financial situation in the region.

The ESM was scheduled to make its first issuance of securities later in the trading day, following its launch in October 2012.

Elsewhere, the pound was lower against the euro with EUR/GBP adding 0.17%, to hit 0.8152.

Later in the day, the U.S. was to release private sector data on economic optimism, as well as official data on consumer credit.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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