Forexpros – The euro was down against the pound on Tuesday, falling to a three-day low as ongoing concerns over the sovereign debt crisis in the single currency bloc weighed.
EUR/GBP hit 0.8816 during European morning trade, the pair’s lowest since August 25; the pair subsequently consolidated at 0.8820, shedding 0.30%.
The pair was likely to find short-term support at 0.8794, the low August 25 and resistance at 0.8866, the high of August 26 and a two-week high.
Earlier in the day, Italy’s Treasury auctioned EUR7.7 billion of bonds, with the yield on 10-year notes falling to 5.22%, compared to a yield of 5.77% at an earlier auction in July.
The European Central Bank began purchasing Italian and Spanish government debt three weeks ago, after borrowing costs surged to euro-lifetime highs, preventing the region’s debt crisis from spreading into core economies.
Meanwhile, on Monday ECB President Jean-Claude Trichet said that growth in the euro zone could be weaker than expected in the months ahead, indicating that the central bank may keep interest rates on hold for the rest of this year.
The euro was also lower against the U.S. dollar, with EUR/USD shedding 0.86% to hit 1.4386.
Later in the day, the U.S. was to release data on consumer confidence as well as an industry report on house price inflation. In addition, the Federal Reserve’s Open Market Committee was to publish the minutes of its August rate-setting meeting.
Forexpros
