Forex Pros – The euro was higher against the pound on Wednesday, rebounding from a one-month low but the single currency’s gains were held in check amid ongoing concerns over sovereign debt contagion to Italy and Spain.
EUR/GBP hit 0.8844 during European morning trade, the daily high; the pair subsequently consolidated at 0.8838, gaining 0.64%.
The pair was likely to find support at 0.8723, the low of June 16 and resistance at 0.8891, Monday’s high.
Attention began to focus on an emergency summit of European Union leaders due to be held on Friday, after policymakers acknowledged that some form of Greek default may be necessary in order to put the country’s debt on a more sustainable footing and prevent contagion to Italy and Spain.
Elsewhere, Ireland became the third euro zone member, after Greece and Portugal, to have its sovereign debt rating slashed to junk status, following a downgrade by ratings agency Moody’s on Tuesday.
Earlier Wednesday, official data showed that the number of people claiming unemployment benefits in the U.K. posted the largest jump in two years in June.
The Office for National Statistics said the number of people claiming jobless benefit rose by 24,500 last month, far more than the expected 15,000 increase.
The unemployment rate remained unchanged at 7.7%, in line with expectations.
Meanwhile, the pound was up against the broadly weaker U.S. dollar, with GBP/USD rising 0.25% to hit 1.5951.
Also Wednesday, official data showed that U.K. average earnings increased slightly more-than-expected in the second quarter, rising 2.3%. Analysts had forecast a rise of 2.1%.
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