Forex Pros - The pound slipped to a two-day low against the U.S. dollar on Monday, tracking the euro lower as concerns over unresolved debt issues in the single currency bloc curbed demand for riskier assets.
GBP/USD hit 1.6137 during early European trade, the pair's lowest since last Thursday; the pair subsequently consolidated at 1.6146, shedding 0.51%.
The pair was likely to find short-term support at 1.6105, the low of May 18 and a seven-week low and resistance at 1.6287, the high of the same day.
On Sunday, Spain's ruling Socialist party lost to conservatives in local and regional elections, raising concerns about how the country will address its debt problems.
The news came after Fitch Ratings cut Greece's debt ratings by three notches on Friday, saying even a "soft" restructuring of the country's debt by European Union policy makers would be considered a default, while rival Standard & Poor's cut its outlook for Italy to negative from stable on Saturday.
Meanwhile, the pound was higher against the euro, with EUR/GBP shedding 0.44% to hit 0.8681.
Earlier Monday, preliminary data showed that manufacturing activity in the euro zone fell more-than-expected in May, dropping to a seven-month low.
Markit said that its preliminary manufacturing PMI fell to a seasonally adjusted 54.8 in May, down from a final reading of 58.0 in April. Analysts had expected the index to decline to 57.6 in May. A number above 50 indicates expansion in the sector.