Forexpros – The euro erased gains against the pound on Tuesday, pulling back from the session high after data confirmed that the euro zone’s economy contracted in the last three months of 2011.
EUR/GBP pulled away from 0.8350 the session high, to hit 0.8328 during European morning trade, dipping 0.01%.
The pair was likely to find support at 0.8309, the low of February 20 and resistance at 0.8350, the session high.
Eurostat said that the euro zone’s gross domestic product shrank by a seasonally adjusted 0.3% in the fourth quarter, in line with expectations and unchanged from a preliminary estimate.
Annualized GDP contracted at a rate of 0.7%, also in line with expectations and unrevised from an initial estimate.
The data fuelled concerns over the outlook for global growth; coming one day after Chinese Premier Wen Jiabao said that the government will target an expansion of 7.5% in 2012, the lowest growth target in eight years.
Investors also remained jittery ahead of the March 8 deadline for Greece’s private creditors to sign on to a EUR106 billion debt swap deal, a requirement for Athens to tap a recently approved EUR130 billion bailout fund.
In the U.K., a report by the British Retail Consortium showed that total retail sales rose at an annualized rate of 2.3% in February, after a 2.1% gain the previous month.
However, the report said like-for-like retail sales fell 0.3% on the year in February, after declining by the same amount in January.
The euro was lower against the U.S. dollar and the yen, with EUR/USD shedding 0.56% to hit 1.3143 and EUR/JPY tumbling 1.29% to hit 106.37.
Also Tuesday, a report by mortgage lender Halifax showed that U.K. house prices fell by 0.5% in February, defying expectations for an increase of 0.3%, after rising by 0.6% in January and continuing the mixed monthly pattern seen over the past year.
Forexpros
