Forexpros – The euro was higher against the pound on Wednesday, as concerns over the prospect of fresh easing measures by the Bank of England continued to weigh on sentiment towards sterling.
EUR/GBP hit 1.0572 during European early afternoon trade, the daily high; the pair subsequently consolidated at 0.8632, gaining 0.15%.
The pair was likely to find support at 0.8532, Tuesday’s low and an almost three-week low and resistance at 0.8685, the high of September 13.
The pound trimmed losses earlier after a report showed that growth in the U.K. service sector unexpectedly increased in September.
The Markit/CIPS services purchasing managers’ index rose to 52.9 in September from 51.1 in August, rebounding after its biggest one-month fall in 10 years and confounding expectations for a decline to 50.5.
But concerns over the fragile U.K. economy were highlighted after the Office of National Statistics said in a report that U.K. second quarter growth was unexpectedly revised down to 0.1%.
Analysts had expected second quarter gross domestic product to remain unchanged at 0.2%.
The ONS said the revision was not based on any new data but was due in large part to new methods.
Sentiment on the pound has been hit in recent weeks by speculation that the BoE may resume its asset purchasing program to bolster the flagging U.K. economy.
The pound was also down against the U.S. dollar, with GBP/USD shedding 0.21% to hit 1.5454.
Also Wednesday, a report in the Financial Times said that European Union finance ministers are looking at a bank recapitalization plan after agreeing that additional measures were needed support European lenders.
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