(MENAFN- FxPro) The pound slid lower against the dollar on Monday as mounting concerns over the prospects of a Greek default and caution ahead of a Federal Reserve meeting later in the week dominated market sentiment.
GBP/USD slipped 0.2% to 1.5526, off Friday's three-week highs of 1.5597.
Safe haven demand for the dollar was boosted after last ditch talks between Greece and its international creditors ended without an agreement on Sunday night, adding to fears over a debt default that would threaten Greece's future in the euro zone.
Europe wants Greece to make spending cuts worth ‚¬2 billion, to secure a deal that will unlock additional funds before its bailout expires at the end of June and it must repay ‚¬1.6 billion to the International Monetary Fund.
European Union officials blamed the collapse in talks on Greece, saying it had failed to offer any new reforms to secure the funding it needs.
In a newspaper interview published on Monday Greece Finance Minister Yanis Varoufakis ruled out a Greek exit from the euro area, and added that debt restructuring was the only way forward.
Investors were looking ahead to a meeting of euro zone finance ministers on Thursday, which was being seen as Greece's last chance to strike a deal.
Market participants were also looking ahead to the outcome of the Fed's latest policy meeting on Wednesday for a clear signal on when it could start to raise interest rates.
Upbeat data on U.S. consumer sentiment on Friday underlined expectations that the central bank could start to hike rates at its September meeting.
Meanwhile, sterling was little changed against the euro, with EUR/GBP at 0.7237, while EUR/USD was last at 1.1239, off lows of 1.1189.
On Friday, ratings agency Standard & Poor's downgraded its outlook on the U.K.'s sovereign rating to negative, citing concerns over the government's decision to hold a referendum on EU membership by 2017.
There is at least a one-in-three probability that the U.K. will lose its AAA rating within the next two years, S&P warned.
The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.17% to 95.4.
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