Forexpros – The euro was higher against the pound on Monday, but gains were limited as Greek pro-bailout party New Democracy’s victory at Sunday’s elections was slowly overshadowed by sustained concerns over the financial crisis in Greece and throughout the euro zone.
EUR/GBP hit 0.8111 during European morning trade, the daily high; the pair subsequently consolidated at 0.8060, rising 0.16%.
The pair was likely to find support at 0.8040, the low of May 22 and resistance at 0.8111, the session high.
The euro found broad support earlier, as political parties supporting Greece’s international bailout were to begin forging a government on Monday, after an election victory over radical leftists staved off the prospect of the debt-laden country leaving the euro.
Conservative New Democracy leader Antonis Samaras called for broad support after winning Sunday’s election over the radical Syriza party, which had threatened to cancel the aid deal in defiance of the country’s lenders.
But sentiment on the single currency remained fragile, as concerns over the handling of Greece’s financial crisis persisted after German Foreign Minister Guido Westerwelle said on Monday the substance of Athens’ reform program remained non-negotiable.
Meanwhile, worries over the euro zone’s debt crisis re-emerged amid surging borrowing costs in Spain, as the yield on the country’s 10-year bonds climbed earlier to a euro-era high of 7.11%.
In the U.K., industry data showed earlier that house price inflation rose 1% in June, following a flat reading the previous month.
Markets were also jittery amid speculation over whether the Bank of England will soon implement more monetary easing, after announcing on Friday an emergency liquidity package to support the U.K. banking system.
Elsewhere, the pound was lower against the U.S. dollar with GBP/USD falling 0.15%, to hit 1.5689.
Later in the day, a two-day G-20 summit was set to begin in Mexico.
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