Investing.com – The euro tumbled to a 10-week low against the pound on Tuesday, as the cost of insuring most euro zone government debt against default rose and Portugal warned of the risks facing its banks.
EUR/GBP hit 0.8366 during European afternoon trade, the pair’s lowest since September 20; the pair subsequently consolidated at 0.8375, tumbling 0.61%.
The pair was likely to find support at 0.8308, the low of September 16 and resistance at 0.8520, Monday’s high.
Earlier in the day, the cost of insuring Italian, Spanish, Portuguese and Irish sovereign debt against default rose to hit the highest levels since the launch of the single currency, reflecting concerns that the deal to bailout Ireland would not contain the euro zone's debt crisis.
Meanwhile, Portugal's central bank warned overnight that its country's banks faced an "intolerable risk" if the government in Lisbon failed to consolidate public finances and urged financial institutions to reinforce their capital in the coming years.
Problems in Portugal could quickly spread to Spain because of the close economic ties between the two countries.
The euro was also down against the U.S. dollar, with EUR/USD plunging 0.92% to hit 1.3006.
Also Tuesday, official data showed that the number of unemployed people in Germany declined less-than-expected in November while the rate of unemployment in the euro zone remained unchanged at 10.1% in October.
Meanwhile, preliminary data showed that consumer price inflation in the euro zone rose in line with expectations in November.
EUR/GBP hit 0.8366 during European afternoon trade, the pair’s lowest since September 20; the pair subsequently consolidated at 0.8375, tumbling 0.61%.
The pair was likely to find support at 0.8308, the low of September 16 and resistance at 0.8520, Monday’s high.
Earlier in the day, the cost of insuring Italian, Spanish, Portuguese and Irish sovereign debt against default rose to hit the highest levels since the launch of the single currency, reflecting concerns that the deal to bailout Ireland would not contain the euro zone's debt crisis.
Meanwhile, Portugal's central bank warned overnight that its country's banks faced an "intolerable risk" if the government in Lisbon failed to consolidate public finances and urged financial institutions to reinforce their capital in the coming years.
Problems in Portugal could quickly spread to Spain because of the close economic ties between the two countries.
The euro was also down against the U.S. dollar, with EUR/USD plunging 0.92% to hit 1.3006.
Also Tuesday, official data showed that the number of unemployed people in Germany declined less-than-expected in November while the rate of unemployment in the euro zone remained unchanged at 10.1% in October.
Meanwhile, preliminary data showed that consumer price inflation in the euro zone rose in line with expectations in November.