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by ForexNewsNow Team on July 12, 2010

GBP/USD slides after weak U.K. data, S&P warning

NEW YORK (Forex News Now) – The pound extended its recent decline against the dollar on Monday, in the wake of weak U.K. economic data and a warning from Standard & Poor’s over Britain’s credit rating.

In early U.S. afternoon currency trading, GBP/USD traded at 1.5017, down 0.3 percent on the day.

S&P earlier affirmed Britain’s AAA long-term credit rating but warned, “[there is] “still a material risk that the U.K.’s net general government- debt burden may approach a level incompatible with the nation’s AAA long-term credit rating.”

According to forex analysis, GBP/USD is likely to touch immediate support around the low of June 23, 1.4802, and encounter resistance around Thursday’s high, 1.5241.

Also Monday, official data showed that Britain’s current account deficit widened far further than forecast in the first quarter of this year.

According to the U.K. statistics agency, the deficit climbed to GBP 9.6 billion during the January-March period, from an upwardly revised surplus of GBP 500 million in the previous quarter. Global forex analysts had expected the current account surplus to widen only to GBP -4.5 billion.

Meanwhile, sterling rose versus the euro: EUR/GBP traded at 0.8384, down 0.1 percent on the day.

 

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