Forexpros — The euro erased early gains against the pound on Tuesday, as investors remained wary ahead of a vote by Slovakia’s parliament to ratify an expansion of the euro zone’s rescue fund, the European Financial Stability Facility.
EUR/GBP pulled away from 0.8734, the pair’s highest since September 28, to hit 0.8690 during European early afternoon trade, shedding 0.19%.
The pair was likely to find support at 0.8619, the low of October 6 and resistance at 0.8734, the day’s high and a two-week high.
Slovakia was to be the last of the euro zone’s 17 members to vote on a deal to enhance the size and powers of the EFSF, but deep divisions within the government on the issue provoked tensions among investors ahead of the vote.
In the U.K., official data showed earlier that manufacturing output in the U.K. grew at the slowest rate in 18 months in the year to August, adding to concerns over a slowdown in economic growth.
The Office for National Statistics said manufacturing production declined 0.3% in August, more than the expected 0. 2% fall, taking the annual rate of growth to 1.5%, the lowest reading since February 2010.
Industrial output rose 0.2% on the month, compared to forecasts for a 0.2% dip. On the year, output was still 1.0% lower.
The euro was also lower against the U.S. dollar, with EUR/USD shedding 0.32% to hit 1.3597.
Also Tuesday, officials from the European Union, International Monetary Fund and European Central Bank were to release a statement after negotiations with Greece on the country’s next tranche of aid concluded.
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