Forexpros – The euro advanced against the pound on Monday, after better-than-expected euro zone retail sales data and as market sentiment was boosted by signs of progress in tackling the debt crisis in the euro zone.
EUR/GBP hit 0.8604 during late European morning trade, the daily high; the pair subsequently consolidated at 0.8500, rising 0.16%.
The pair was likely to find support at 0.8557, the low of December 1 and resistance 0.8640, the high of November 21.
Official data showed that retail sales in the euro zone rose more-than-expected in October, advancing 0.4% after a 0.6% decline the previous month.
Analysts had expected retail sales to rise 0.2% in October.
Earlier Monday, data showed that investor confidence in the euro zone fell
more-than-expected this month, remaining in negative territory for the fifth consecutive month.
In the U.K., a report showed that service sector activity rose unexpectedly in November, advancing for the eleventh successive month although at a modest pace as incoming new business increased at the slowest rate of the year so far.
The services purchasing managers’ index rose to 52.1 after a reading at 51.3 in October. Analysts had expected the PMI to decline to 50.6 in November.
Meanwhile, investors eyed a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel later in the day. The two leaders were to resume discussions on joint proposals for more coercive budget discipline in the single currency bloc, ahead of Friday’s European Union summit.
Risk sentiment strengthened earlier after Italian Prime Minister Mario Monti unveiled a EUR30 billion package, aimed at slashing the second largest deficit in the euro zone.
Elsewhere, sterling was higher against the U.S. dollar with GBP/USD rising 0.27%, to trade at 1.5640.
Later in the day, the U.S. Institute of Supply Management was to release a report on service sector activity. The U.S. was also to publish government data on factory orders.
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