Forex Pros – The euro trimmed gains against the pound on Wednesday, retreating from a 13-month high after official data showed that euro zone retail sales declined unexpectedly in March.
EUR/GBP retreated from 0.9030, the pair’s highest since March 22, 2010 to hit 0.9002 during European morning trade, gaining 0.12%.
The pair was likely to find support at 0.8881, Tuesday’s low and resistance at 0.9119, the high of March 16.
Official data showed that euro zone retail sales fell sharply in March, pointing to weaker household demand, but sales in February were revised upwards.
Eurostat said retail sales in the 17 countries using the euro fell 1.0% month-on-month in March for a 1.7% year-on-year drop. Economists had expected a 0.1% monthly rise and a flat year-on-year reading.
Earlier in the day, the euro hit a 13-month high after a survey of the UK construction sector came in weaker than expected, adding to expectations that UK interest rates would be on hold for some time.
The Markit/CIPS headline construction PMI index fell to 53.3 in April from 56.4 in March. Economists had expected the index to decline to 55.5.
The euro was also higher against the U.S. dollar, with EUR/USD rising 0.29% to hit 1.4870.
The single currency remained well supported ahead of the European Central Bank’s policy setting meeting on Thursday, with the bank expected to prepare markets for a possible rate hike in June.
ForexPros.com
