Forexpros – The euro pushed higher against the pound on Monday but gains were limited as news of the death of North Korean leader Kim Jong il and the risk of possible ratings downgrades on euro zone countries weighed on risk appetite.
EUR/GBP hit 0.8414 during European morning trade, the daily high; the pair subsequently consolidated at 0.8408, gaining 0.22%.
The pair was likely to find support at 0.8372, the low of December 14 and a 10-month low and resistance at 0.8424, the high of December 15.
Market sentiment was hit by the North Korean news, as uncertainty over the future leadership of the state sparked fears over geopolitical instability in northeast Asia.
Meanwhile, concerns over mass credit rating downgrades across the euro zone continued after ratings agency Fitch put six euro zone countries on review pending possible downgrades on Friday and revised its long-term outlook on France’s triple A rating to ‘negative’ from ‘stable’.
Over the weekend, European Central Bank President Mario Draghi reiterated his opposition to intervening in the bond markets and buying up sovereign debt in order to ease the euro zone’s debt crisis in an interview with the Financial Times.
European Union leaders were to hold talks later in the day to discuss measures aimed at resolving the region’s ongoing debt crisis, including the possibility of European nations lending EUR200 billion to the International Monetary Fund.
Elsewhere, the euro was lower against the U.S. dollar, with EUR/USD slipping 0.13% to hit 1.3024.
Also Monday, a report by the U.K.’s largest property website Rightmove showed that house price inflation fell 2.7% in December after a 3.1% decline the previous month.
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