Investing.com - The pound hit session lows against the U.S. dollar on Tuesday after weak data out of the euro zone reinforced concerns over the economic outlook for the region, bolstering safe haven demand.
GBP/USD hit 1.6076 during European afternoon trade, the session low; the pair subsequently consolidated at 1.3122, shedding 0.18%.
Cable was likely to find support at 1.6020, Monday's low and resistance at 1.6127, the session high.
The pound tracked the euro lower against the dollar 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.
Market sentiment 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.
Sterling was little changed against the euro, with EUR/GBP inching up 0.07% to 0.8144.
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.
