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Forex - Pound extends losses vs. stronger dollar

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Investing.com - The pound extended losses against the broadly stronger dollar on Wednesday as concerns over the euro zone and data confirming a fourth quarter contraction in the U.K. economy weighed.

GBP/USD hit 1.5095 during European afternoon trade, the pair's lowest since March 21; the pair subsequently consolidated at 1.5104, shedding 0.37%.

Cable was likely to find support at 1.5026, the low of March 20 and resistance at 1.5180, the session high.

Investor sentiment was hit by doubts over prospects for forming a new government in Italy following media reports that Pier Luigi Bersani, the head of Italy's center-left alliance, ruled out forming a coalition government, saying that only an "insane person" would want to govern the country.

Earlier Wednesday, demand at an auction of Italian government debt was soft amid investor concerns over the ongoing political stalemate.

Investors also remained concerned that the bailout deal for Cyprus reached earlier in the week could set a precedent for future bailouts in larger euro zone states, with big bank depositors and senior bond holders forced to suffer losses.

In the U.K., official data showed that the economy contracted by 0.3% in the three months to December, in line with preliminary estimates and analysts' forecasts.

Economic growth for 2012 was revised down to 0.2% from a preliminary estimate for 0.3% growth.

Sterling was higher against the euro, with EUR/GBP falling 0.31% to 0.8457.

The U.S was to release private sector data on pending home sales later in the trading day.

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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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