Forexpros – The euro was higher against the pound on Thursday, after well received French and Spanish bond auctions supported demand for riskier assets.
EUR/GBP hit 0.8595 during European morning, the pair’s highest since November 29; the pair subsequently consolidated at 0.8576, rising 0.14%.
The pair was likely to find support at 0.8545, the low of November 25 and resistance at 0.8609, the high of November 29.
Spain’s Treasury auctioned the full targeted amount of EUR3.75 billion of government bonds, while France auctioned EUR4.5 billion of debt.
France sold EUR1.57 billion of 10-year bonds at an average yield of 3.18%, down from 3.22% at a similar auction last month. The average yield on Spain’s five-year bonds was 5.54%, compared with 4.84% in early November.
Market sentiment was hit earlier after European Central Bank President Mario Draghi said downside risks to the economic outlook have increased, adding that the bank’s temporary measures are only limited.
In the U.K., a report showed that manufacturing activity fell less-than-expected in November, but remained in contraction territory for the second consecutive month.
Markit said that its U.K. manufacturing purchasing managers’ index fell to 47.6 in November, after a reading at 47.8 the previous month. Analysts had expected the manufacturing PMI to decline to 47.0 last month.
Elsewhere, sterling was higher against the U.S. dollar with GBP/USD advancing 0.21%, to hit 1.5735.
Later in the day, the U.S. was to release its weekly report on initial jobless claims, while the Institute of Supply Management was to release data on manufacturing activity.
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