Forexpros – The euro fell to a session low against the pound on Thursday, after better-than-expected U.K. retail sales data, while broad concerns over the sovereign debt crisis in the euro zone dampened demand for the shared currency.
EUR/GBP hit 0.8060 during European morning trade, the session low; the pair subsequently consolidated at 0.8066, shedding 0.21%.
The pair was likely to find support at 0.8023, Tuesday’s low and resistance at 0.8098, Wednesday’s high.
The pound found support after official data showed that U.K. retail sales rose by a seasonally adjusted 1.4% in May, beating expectations for a 1.2% gain.
Retail sales for April were revised down to a 2.4% drop from a previously reported decline of 2.3%.
Meanwhile, the euro remained under pressure after a report showing that manufacturing activity in Germany slowed to the lowest level in three years in June, as the ongoing euro zone crisis hit export demand.
Manufacturing activity in the wider euro zone contracted at the fastest pace since June 2009 in June, with the PMI falling to 44.8 in June from a final reading of 45.1 in May.
The euro zone’s services PMI ticked up to 46.8 from 46.7 in May, against expectations for a dip to 46.5, but remained well below the 50 level that separates contraction from expansion.
Investors remained jittery ahead of the outcome of an audit of Spanish banks later in the day, amid concerns that the results could show that a EUR100 billion bailout for the country’s banks agreed earlier this month would not be large enough.
Earlier in the day, Spain’s Treasury sold slightly more than the targeted amount of EUR2 billion at an action of government debt, but the country’s borrowing costs rose sharply.
The average yield on the five-year bond climbed to 6.07%, up from 4.96% at a similar auction last month.
The euro was lower against the U.S. dollar, with EUR/USD slipping 0.23% to hit 1.2678 but pushed higher against the yen, with EUR/JPY adding 0.24% to trade at 101.30.
Later in the day, European Central Bank head Mario Draghi was to speak.
The U.S. was to produce government data on unemployment claims, followed by preliminary data on manufacturing activity and an industry report on existing home sales. The country was also to release data on manufacturing activity in the Philadelphia area.
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