Forexpros – The euro turned lower against the pound on Wednesday, shrugging off data showing that German industrial output rose more-than-expected in October, as concerns over the debt crisis in the region weighed.
EUR/GBP hit 0.8565 during European late morning trade, the daily low; the pair subsequently consolidated at 0.8563, shedding 0.30%.
The pair was likely to find support at 0.8532, the low of November 30 and resistance at 0.8612, the session high and a three-day high.
German industrial production rose 0.8% in October, beating expectations for a 0.3% increase, after falling by a revised 2.7% the previous month but the country’s economy ministry said it expects production to remain muted in the months ahead.
But sentiment on the euro was hit after the Wall Street Journal reported that an unnamed senior German official expressed pessimism on the prospect of success at this week’s critical European Union summit.
European leaders are to discuss proposed changes to EU treaties which would allow for greater fiscal integration and stricter enforcement of budgetary discipline in the single currency bloc, clearing the way for the European Central Bank to play a bigger role in stabilizing euro zone bond markets.
In the U.K. a report earlier showed that manufacturing output posted the largest decline in six months in October, while industrial production also posted the biggest drop since April.
The Office for National Statistics said manufacturing production fell 0.7%, disappointing expectations for a modest 0.1% decline.
On the year, manufacturing output rose 0.3%, significantly below expectations for a 1.4% gain, after rising at a rate of 2.0% in September.
Industrial output also fell by 0.7% in October, worse than expectations for a 0.3% decline and was down 1.7% on the year.
The poor data underlined concerns over weakening economic conditions in the U.K. and reinforced expectations the Bank of England may introduce more stimulus into the economy to shore up growth.
The euro was also lower against the U.S. dollar, with EUR/USD sliding 0.21% to hit 1.3372.
Also Wednesday, U.S. Treasury Secretary Timothy Geithner said the International Monetary Fund has a key role to play in resolving the euro zone’s debt crisis, but denied suggestions that the Federal Reserve would lend money to the institution.
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