Forex Pros – The euro was trading close to a three-week low against the broadly stronger pound on Monday, as growing expectations that the Bank of England will raise interest rates by the middle of the year drew more investors.
EUR/GBP hit 0.8406 during European morning trade, the pair’s lowest since January 19; the pair subsequently consolidated at 0.8412, shedding 0.22%.
The pair was likely to find support at 0.8376, the low of January 19 and resistance at 0.8476, Friday’s high.
The BoE’s monetary policy committee is to meet later this week and while it is widely expected to keep the bank rate unchanged at 0.5% and maintain its asset buying program, markets have priced in a rate hike by May.
Last month BoE policymaker Martin Weale became the second committee member to join Andrew Sentance in voting to increase rates.
The euro was also down against the U.S. dollar, with EUR/GBP shedding 0.22% to hit 1.3549.
Earlier in the day, official data showed that German factory orders fell significantly more-than-expected in December.
ForexPros.com
