Forexpros – The euro came off a one-month high against the pound on Tuesday, amid growing fears over Spain and after weak euro zone data underlined concerns over the economic impact of the ongoing sovereign-debt crisis.
EUR/GBP pulled back from 0.8141, the pair’s highest since May 3, to hit 0.8102 during European morning trade, shedding 0.26%.
The pair was likely to find support at 0.8066, Monday’s low and resistance at 0.8140, the session high.
The euro gave up early gains after Spain’s Treasury Minister Cristobal Montoro said that the country was effectively shut out of financial markets because of the current high level of borrowing costs.
The comments sparked fresh concerns that Madrid will be forced to seek an international bailout in order to shore up its fragile banking system.
Meanwhile, revised data showed that the euro zone’s services sector contracted at a slightly slower rate than initially expected in May, but still shrank at the fastest pace since June 2009.
The final euro zone services business activity index stood at 46.7 in May, up from a preliminary estimate of 46.5 but still below the key 50 level.
Another report showed that euro zone retail sales dropped 1% in April, disappointing expectations for a more modest 0.1% decline.
The euro had climbed to a session high against sterling earlier, amid hopes for a breakthrough on the debt crisis in the euro zone, ahead of a teleconference of finance ministers from the Group of Seven industrialized nations later in the day.
The shared currency was also lower against the U.S. dollar and the yen, with EUR/USD shedding 0.52% to hit 1.2432 and EUR/JPY down 0.64% to hit 97.28.
Later Tuesday, the Institute for Supply Management was to release a report on U.S. non-manufacturing activity, while markets in the U.K. were to remain closed for the Queen’s jubilee.
Forexpros
