Forexpros – The euro was trading close to an 11-month low against the broadly stronger pound on Wednesday, as ongoing concerns over the debt crisis in the euro zone bolstered demand for the relative safety of sterling.
EUR/GBP hit 0.8345 during European morning trade, the daily low; the pair subsequently consolidated at 0.8355, inching up 0.04%.
The pair was likely to find short-term support at 0.8339, Tuesday’s low and an 11-month low and resistance at 0.8388, Tuesday’s high.
The pound was also higher against the U.S. dollar as market sentiment was boosted ahead of a refinancing operation by the European Central Bank, aimed at averting a liquidity crunch in the euro zone.
The ECB was to launch its first offering of unlimited three-year loans to European lenders later in the day, in an attempt to ease current funding problems and boost bond purchases from troubled euro zone states.
In the U.K., the minutes of the Bank of England’s December meeting showed that policymakers believed the balance of risks for growth and the outlook for inflation had not significantly altered from the previous month, but indicated that the bank may increase its asset purchase program in the New Year.
“Some members continued to note that the balance of risks to inflation in the November Inflation Report projections meant that a further expansion of the asset purchases program might well become warranted in due course,” the minutes said.
Earlier Wednesday, a report by researchers GfK showed that consumer confidence in the U.K. weakened in December, hitting the lowest level since February 2009.
The pound was up 0.58% against the U.S. dollar, with GBP/USD trading at 1.5758.
Later Wednesday, the U.S. was to produce industry data on existing home sales.
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