Forexpros – The euro erased gains against the pound on Thursday, pulling away from a one-week high after preliminary data showed that the euro zone’s economy slowed sharply in July.
EUR/GBP pulled away from 0.8830, the pair’s highest since July 14, to hit 0.8782 during European morning trade, shedding 0.21%.
The pair was likely to find support at 0.8704, the low of July 18 and a six-week low and resistance at 0.8846, the high of July 13.
The Markit composite purchasing managers’ index fell to 50.8 from 53.3 in June. A reading above 50 on the index indicates expansion.
The drop in the PMI between June and July was the largest since November 2008, when the euro-zone economy was heading into recession.
The PMI for the manufacturing sector fell to the lowest since August 2009, hitting 50.4 down from 52 in June, while the PMI for the services sector fell to 51.4 from 53.7.
The euro advanced to a five-day high earlier after France and Germany announced that they had reached a joint deal on a strategy for dealing with the Greek debt crisis.
The announcement came after German Chancellor Angela Merkel and French President Nicholas Sarkozy held a meeting, ahead of a summit in Brussels of all 17 euro-zone national leaders later Thursday.
The euro was also lower against the U.S. dollar, with EUR/USD shedding 0.33% to hit 1.4167.
Also Thursday, official data showed that retail sales in the U.K. rose slightly more-than-expected in June after falling sharply in May.
The Office for National Statistics said retail sales rose 0.7% last month, slightly above expectations for a 0.6% gain.
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