Forex Pros – The euro was trading close to a four-week high against the pound on Monday, supported by expectations of a European Central Bank rate increase and a fresh Greek bailout deal.
EUR/GBP hit 0.8924 during European morning trade, the daily high; the pair subsequently consolidated at 0.8913, easing up 0.04%.
The pair was likely to find support at 0.8844, Friday’s low and resistance at 0.9006, the high of May 3.
The Bank of England is to hold a policy setting meeting later in the week and a slew of weaker-than-expected data last week reinforced the view that a sluggish recovery will drive them to keep U.K. interest rates low for some months to come.
In contrast, the ECB is to hold its rate-setting meeting on Thursday, where it is widely expected to signal a July interest-rate hike. The bank bumped up its key interest rate to 1.25% from 1% in April amid rising consumer prices.
Earlier Monday, official data showed that euro zone producer prices rose slightly more-than-expected in April, up 0.9% after a rise of 0.8% in March, indicating continuing upward pressure on consumer prices.
Meanwhile, the euro was almost unchanged against the U.S. dollar, with EUR/USD dipping 0.01% to hit 1.4632.
Also Monday, U.K. Chancellor George Osborne was forced to defend his deficit-cutting plan after a group of economists said the pace of cutbacks was putting the U.K.’s economic recovery at risk.
ForexPros.com
