Forexpros – The euro was little changed against the pound in thin trade on Wednesday, as investors remained on the sidelines ahead of monetary policy decisions by the European Central Bank and the Bank of England on Thursday.
EUR/GBP hit 0.8028 during European morning trade, the session low; the pair subsequently consolidated at 0.8033, dipping 0.02%.
The pair was expected to find near-term support at 0.8005, Monday’s low and resistance at 0.8076, Monday’s high.
The ECB was widely expected to cut interest rates to 0.75% from the current record low 1.00% to help bolster growth in the region, following a recent string of weak economic data.
Earlier in the day, the final reading of the euro zone services purchasing managers’ index came in at 47.1 in June, slightly above the preliminary estimate of 46.8, but holding below the 50 level which separates contraction from growth for the fifth consecutive month.
In the U.K., data showed that service sector activity expanded at the slowest rate in eight months in June, fuelling expectations for a fresh round of quantitative easing from the BoE at its meeting on Thursday.
The Markit/CIPS Services PMI fell to 51.3 in June from a reading of 53.3 in May, missing expectations for a decline to 53.0.
Trade volumes were expected to remain light on Wednesday, with markets in the U.S. closed for the Independence Day holiday.
The euro was lower against the U.S. dollar and the yen, with EUR/USD slipping 0.20% to 1.2582 and EUR/JPY down 0.19% to 100.41.
Also Wednesday, official data showed that retail sales in the euro zone rose by a seasonally adjusted 0.6% in May, beating expectations for a 0.3% gain, but total sales for April were revised down to a 1.4% drop from a previously reported decline of 1%.
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