Forexpros – The euro edged higher against the pound on Tuesday, as sentiment on the single currency steadied and after the release of weaker-than-expected U.K. data, but the euro remained vulnerable amid sustained concerns over Spain and Greece.
EUR/GBP hit 0.8080 during European morning trade, the session high; the pair subsequently consolidated at 0.8068, easing up 0.11%.
The pair was likely to find support at 0.8016, the low of June 1 and resistance at 0.8130, the high of June 7.
The pound came under pressure after the Office for National Statistics said that manufacturing output in the U.K. fell 0.07% in April, following a 0.9% increase in March, disappointing expectations for a more modest 0.2% decline.
Industrial production in the U.K. was flat in April, disappointing expectations for a 0.1% increase, after declining 0.3% in March.
The weak data fuelled concerns that the Bank of England may implement more monetary stimulus measures in order to shore up economic growth.
Meanwhile, the euro found support as concerns over the logistics of Spain’s banking bailout eased, but investors remained wary of pushing the single currency too high as questions remained over the source of the rescue funds and whether the bailout repayments would add to the country’s already high borrowing costs.
The yield on Spanish 10-year bonds climbed to 6.63% earlier, hovering close to the critical 7% threshold, which is seen as unsustainable in the long term.
Market sentiment also remained cautious ahead of Sunday’s general election in Greece, which could decide the course of the country’s future in the euro zone.
The euro pushed higher against the U.S. dollar and the yen, with EUR/USD adding 0.21% to hit 1.2508 and EUR/JPY up 0.36% to trade at 99.56.
The yen weakened against the euro and the dollar earlier after the International Monetary Fund said the yen was “moderately overvalued,” and indicated that it supported Japan’s view on yen weakening interventions, given current market conditions.
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