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Forex - Euro hits 2-day low vs. pound as expected M&A flow weighs

Published 04/04/2011, 05:36 AM
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Investing.com – The pound rose to a two-day high against the euro on Monday, boosted by expectations for sterling positive mergers and acquisitions inflows after U.K. telecoms company Vodafone agreed to sell its stake in French mobile operator SFR.

EUR/GBP hit 0.8793 during European morning trade, the pair’s lowest since Thursday; the pair subsequently consolidated at 0.8808, shedding 0.30%.

The pair was likely to find support at 0.8752, last Wednesday’s low and resistance at 0.8852, last Thursday’s high and a five-month high.

U.K. mobile-network operator Vodafone agreed to sell its 44% stake in French mobile operator SFR to French media giant Vivendi for approximately EUR7.95 billion.

Also Monday, data showed that the rate of growth in the U.K.’s construction sector slowed only slightly in March from February's eight-month high.

The Markit/CIPS construction purchasing manager’s index eased to 56.4 in March from 56.5 the previous month. Analysts had expected the PMI to decline to 54.8 last month.

The pound was also higher against the U.S. dollar, with GBP/USD easing up 0.11% to hit 1.6127.

Elsewhere, official data showed that producer price inflation in the euro zone posted its sharpest annual gain for nearly two-and-a-half years in February.

Eurostat said that producer prices rose 0.8% from January and were 6.6% higher than in February last year, the strongest annual increase since September 2008.

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