Forexpros – The euro remained close to a ten-month low against the pound on Tuesday, despite unexpectedly strong German business climate data and a successful Spanish bond auction.
EUR/GBP hit 0.8360 during European morning trade, the pair’s lowest since February 18; the pair subsequently consolidated at 0.8369, declining 0.21%.
The pair was likely to find support at 0.8330, the low of January 18 and resistance at 0.8416, Monday’s high.
German research institute Ifo said its Business Climate Index rose to a seasonally adjusted 107.2 in December from 106.6 the previous month.
Analysts had expected the index to fall to 106.0 in December.
Elsewhere, Spain’s Treasury sold more than the targeted amount of EUR4.5 billion, auctioning EUR7 billion of three-month bonds at an average yield of 1.73%, down from 5.11% at a similar auction last month.
Meanwhile, EUR1.92 billion of six-month bonds were sold, at an average yield of 2.43%, down from 5.22% in November.
The euro remained under pressure after European Central Bank President Mario Draghi reiterated that the ECB’s purchases of peripheral debt were temporary and “not infinite” on Monday, disappointing hopes for further bond buying.
European Union finance ministers agreed on Monday to boost International Monetary Fund resources by EUR150 billion with the support of EU allies, falling short of the EUR200 billion target.
Sterling was sharply higher against the U.S. dollar with GBP/USD climbing 0.83%, to hit 1.5628.
In the U.K., a report by the Confederation of British Industry showed that an index on realized sales rose unexpectedly to 9 in December, confounding expectations for a fall to minus 14.
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