Sterling lower as Greek worries dominate markets' mood; S&P downgrades country's rating

This week the market sentiment is dominated by the Greek woes as well as the looming FOMC meeting. The British currency was therefore lower on Monday, as the safe-haven demand for the greenback was boosted.

GBP/USD slipped 0.34% to 1.5505, off Friday’s three-week highs of 1.5597.

Last week, ratings agency Standard & Poor’s downgraded its outlook on the U.K.'s sovereign rating to negative, referring to concerns over the government’s decision to hold a referendum on EU membership by 2017.

Talks between Greece and its creditors held in Brussels ended without a clear conclusion adding to concerns about the default. The two sides have little time to conclude a deal before a deadline for eurozone payment of 245 billion of euros on June 30, as well as the payment to the International Monetary Fund due the same day.

Creditors urge Greece to make spending cuts worth €2 billion, to secure an agreement 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.

Meanwhile, Greek Deputy Prime Minister Yannis Dragasakis said in a statement that the country's delegation remains ready to resume talks but blamed European lenders for insisting on pension cuts and value-added-tax hikes to close the projected budget gap.

The dollar was boosted after data on Friday showed that U.S. consumer sentiment improved highlighting expectations that the central bank may start raising interest rates as early as September.