Forexpros – The euro was down against the pound on Wednesday, trading close to a one-year low as concerns over the ongoing debt crisis in the single currency bloc weighed, ahead of an auction of German government debt.
EUR/GBP hit 0.8318 during European morning trade, the pair’s lowest since December 23; the pair subsequently consolidated at 0.8326, slipping 0.15%.
The pair was likely to find support at 0.8302, the low of December 21 and a one-year low and resistance at 0.8371, Tuesday’s high.
Earlier in the day, data showed that service sector activity in the euro zone contracted for the fourth consecutive month in December, albeit at a slower pace than initially estimated.
The final reading of the euro zone’s services purchasing managers’ index rose to 48.8 in December, up from a preliminary estimate of 48.3 and above the reading of 47.5 recorded in November.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
A separate report showed that consumer price inflation in the euro zone eased broadly in line with market expectations in December, rising by a seasonally adjusted 2.8%.
In the U.K., a report showed that construction sector activity unexpectedly improved in December, extending the period of sustained expansion to 12 months.
Later in the day, Germany was to auction EUR5 billion of 10-year government bonds, while Italian 10-year bond yields continued to hover just below the critical 7% threshold amid concerns over the country’s funding needs.
The euro was also lower against the U.S. dollar, with EUR/USD sliding 0.16% to hit 0.8325.
Also Wednesday, the U.S. was to release official data on factory orders.
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