Forexpros – The euro eased off a four-week low against the pound on Wednesday, but the single currency remained under pressure amid doubts that a European Union summit this week will make headway on tackling the region’s debt crisis.
EUR/GBP pulled back from 0.7983, the pair’s lowest since May 30, to hit 0.7993 during European morning trade, inching up 0.08%.
The pair was likely to find support at 0.7970, the low of May 30 and resistance at 0.8038, Tuesday’s high.
The pound remained supported despite mounting speculation that the Bank of England may implement fresh quantitative easing measures to shore up growth as soon as next month.
On Tuesday, BoE governor Mervyn King the outlook for the U.K. economy had deteriorated in recent weeks as a result of the ongoing euro zone crisis, and added that an interest rate cut would be less effective in stimulating the economy than more easing.
Investors remained jittery ahead of the upcoming EU summit as hopes for concrete steps to tackle the region’s debt crisis faded, after German Chancellor Angel Merkel reiterated her opposition to the idea of joint euro zone bonds on Tuesday.
Earlier Wednesday, Italy saw borrowing costs climb to the highest level since December at an auction of six-month government bonds.
Italy’s Treasury sold the full targeted amount of EUR9 billion of six-month government bonds at an average yield of 2.95%, up from 2.10% at a similar auction last month.
The euro dipped lower against the U.S. dollar and the yen, with EUR/USD inching down 0.04% to trade at 1.2490 and EUR/JPY slipping 0.03% to hit 99.32.
Later Wednesday, the U.K. was to release data on industrial order expectations, while the U.S. was to publish official data on durable goods orders, as well as industry data on pending home sales.
Elsewhere, German Chancellor Angela Merkel was to hold talks with French President Fran?ois Hollande ahead of the EU summit.
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