Forex Pros –The euro rose to a three-week high against the broadly weaker pound on Tuesday, after official data confirmed that U.K. gross domestic product rose in line with expectations the first quarter.
EUR/GBP hit 0.8966 during European morning trade, the pair’s highest since June 8; the pair subsequently consolidated at 0.8957, gaining 0.25%.
The pair was likely to find support at 0.8858, Monday’s low and resistance at 0.9006, the high of May 3.
The Office of National Statistics confirmed that Britain’s economy grew by a disappointing 0.5% in the first three months of the year, after an unrevised contraction of 0.5% in the final quarter of 2010.
The statistics office said household consumption fell by 0.6%, its biggest fall since the depths of the recession in 2009
A separate report showed that the U.K.’s current account deficit expanded more-than-expected in the first quarter.
Meanwhile, the euro remained supported optimism that Greece’s parliament would approve a package of austerity measures central to averting the euro zone’s first sovereign debt default.
The pound was also lower against the U.S. dollar, with GBP/USD shedding 0.41% to hit 1.5923.
Later in the day, Bank of England Governor Mervyn King and several policymakers were to testify on inflation and the economic outlook before Parliament’s Treasury Committee.
Their comments would be closely watched amid growing speculation the central bank was about to embark on more monetary stimulus.
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