Forexpros – The euro was higher against the pound on Thursday, but remained close to a three-and-a-half year low as sustained worries over political turmoil in Greece and the country’s future within the euro zone continued to weigh on market sentiment.
EUR/GBP hit 0.8046 during European morning trade, the daily high; the pair subsequently consolidated at 0.8043, rising 0.34%.
The pair was likely to find support at 0.8002, the session low and resistance at 0.8079, the high of May 7.
Sentiment on the euro remained vulnerable after Alexis Tsipras, the head of Greece’s second-biggest party Syriza, gave up his attempt to form a new government on Wednesday, putting Greek Socialist leader Evangelos Venizelos in a position to make a last-ditch attempt to form a government on Thursday.
Chances of any deal on a coalition government looked slim however, after two failed attempts, making new elections in three to four weeks the most likely outcome and fueling fears that Greece will not have a government in place in time to secure its next tranche of international aid next month.
Adding to concerns, the European Central Bank cut its 2012 gross domestic product growth outlook to minus 0.2% from minus 0.1%, in its monthly report published earlier, as downside risks remain to the economic outlook.
Meanwhile, official data showed that French industrial production fell more-than-expected in March, declining 0.9% after a 0.9% rise the previous month. Analysts had expected industrial production to fall 0.4% in March.
Elsewhere, the pound was moderately lower against the U.S. dollar with GBP/USD falling 0.21%, to hit 79.70.
Also Thursday, official data showed that manufacturing production in the U.K. rose more-than-expected in March, adding 0.9% after a 1.1% decline the previous month. Analysts had expected manufacturing production to rise 0.5% in March.
Later in the day, the U.K. was to publish official data on manufacturing production, as well as a monthly estimate of gross domestic product by the National Institute of Economic and Social Research, while the BoE was to announce its benchmark interest rate.
The U.S. was to release official data on trade balance, followed by government reports on unemployment claims and import prices. Federal Reserve Chairman Ben Bernanke was also due to speak.
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