Forexpros - The pound was trading close to session lows against the U.S. dollar on Wednesday, as market sentiment was hit by fresh concerns over the economic outlook for the euro zone and uncertainty ahead of a critical Greek parliamentary vote on austerity. GBP/USD hit 1.5955 during U.S. morning trade, the pair’s lowest October 24; the pair subsequently consolidated at 1.5977, down 0.11%. Cable was likely to find near-term support at 1.5935, the low of October 24 and resistance at 1.6041, the session high. The pound weakened against the dollar after the European Commission slashed its forecast for growth in the euro zone earlier, saying it now expects gross domestic product to contract by 0.4% this year, expand by just 0.1% in 2013 before growing 1.4% in 2014. The report came after official data showed that German industrial production dropped 1.8% in September, compared to expectations for a 0.5% decline, adding to concerns that the bloc’s economy is weakening. Investors were also remaining cautious ahead of a critical Greek parliamentary vote later in the day, on an austerity bill necessary for Athens to secure its next installment of bailout funds. Sterling hit session highs against the dollar earlier in the day, as President Barack Obama’s re-election was seen as boosting the chances that the Federal Reserve’s policy of quantitative easing will remain in place. Investors’ attention began to focus on the fiscal cliff, USD500 billion of automatic tax hikes and spending cuts due to come into effect on January 1 unless lawmakers can reach an agreement, clouding the outlook for U.S. and global growth. The pound was trading close to a five-week high against the euro, with EUR/GBP down 0.34% to 0.7983. Also Wednesday, European Central Bank President Mario Draghi warned that the economic situation in the euro zone is currently weak and will remain so for the time being.

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