Forexpros – The euro edged higher against the pound on Thursday, as selling in the single currency eased, but it remained vulnerable to further losses amid sustained concerns over the deepening debt crisis in the euro zone.
EUR/GBP hit 0.8016 during European morning trade, the pair’s highest since May 28; the pair subsequently consolidated at 0.8003, gaining 0.16%.
The pair was likely to find near-term support at 0.7970, Wednesday’s low and resistance at 0.8045, the high of May 25.
The euro found support after official data showed Germany’s unemployment rate dropped to a record low of 6.7% in May, indicating that the euro area’s largest economy is weathering the effects of the debt crisis.
But sentiment on the euro remained fragile amid fears that elevated Spanish bond yields and the high cost of bank rescues could force Madrid to seek an international bailout.
The yield on Spanish 10-year bonds rose to 6.67% earlier, nearing the critical 7% threshold that preceded bailouts in Greece, Ireland and Portugal.
Meanwhile, uncertainty over the outcome of Greek elections weighed after an opinion poll on Wednesday showed that anti-bailout party Syriza had gained a narrow lead ahead of the June 17 vote.
Investors were also awaiting the outcome of an Irish referendum on the European Union’s fiscal treaty.
The euro pushed higher against the U.S. dollar with EUR/USD adding 0.46% to hit 1.2423 and ticked up against the yen, with EUR/JPY rising 0.17% to hit 97.94.
Later in the day, the U.S. was to release preliminary data on first quarter economic growth, as well as reports on private sector employment and initial jobless claims and data on business activity in the Chicago area.
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