Forexpros – The euro pushed higher against the pound on Tuesday, as investors anticipated the outcome of the European Central Bank’s meeting on Thursday, amid expectations that the central bank will take steps to stem the debt crisis in the euro zone.
EUR/GBP hit 0.7822 during European morning trade, the session high; the pair subsequently consolidated at 0.7818, gaining 0.20%.
The pair was likely to find near-term support at 0.7789, Monday’s low and resistance at 0.7859, the high of July 26.
Expectations have been building that the ECB will announce bold measures to tackle the long running euro zone debt crisis after central bank head Mario Draghi pledged last week to do whatever is necessary to preserve the euro.
But investors remained wary amid concerns that a less aggressive than expected policy response by the ECB could send markets lower.
Sentiment on the pound remained fragile after data on Monday showed that U.K. mortgage approvals fell to the lowest level in 18 months in June, while a separate report showed that net lending grew at the slowest pace in 12 months in July, underlining concerns over economic weakness.
The Bank of England was also to hold its monthly rate setting meeting on Thursday, but was not widely expected to announce any change to current monetary policy.
Market participants were also eyeing the outcome of the Federal Reserve’s policy setting meeting on Wednesday, amid speculation over whether the U.S. central bank will indicate if further quantitative easing measures are imminent.
The euro was little changed against the U.S. dollar, with EUR/USD inching up 0.01% to 1.2261 and eased higher against the yen, with EUR/JPY rising 0.15% to 95.97.
Earlier Tuesday, official data showed that the rate of consumer price inflation in the euro zone remained unchanged at 2.4% in July.
Separate reports showed that the Germany’s unemployment rate remained steady at 6.8% in July, but Italy’s unemployment rate rose to 10.8% in June, the highest level since quarterly records began in 1999.
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