Investing.com - The euro edged higher against the pound on Thursday, boosted by expectations that the European Central Bank is set to announce steps to lower Spanish and Italian borrowing costs and ease the debt crisis in the euro zone.
EUR/GBP hit 0.7940 during European morning trade, the pair’s highest since Tuesday; the pair subsequently consolidated at 0.7929, easing up 0.08%.
The pair was likely to find support at 0.7886, Wednesday’s low and resistance at 0.7955, the high of August 31 and an almost one-month high.
Demand for the single currency has been underpinned in recent weeks by expectations that the ECB is set to announce more details of measures to help stabilize the region’s sovereign debt markets at its post-policy meeting press conference later in the day.
Speculation mounted on Wednesday, after Bloomberg reported that the ECB is planning unlimited purchases of government bonds with maturities of up to three years, without setting bond yield targets.
France saw bond yields fall at an auction of five- and 10-year government bonds on Thursday, while Spain also saw borrowing costs decline at an auction of two-, three- and four-year government bonds.
Meanwhile, the Bank of England was to hold its monthly policy-setting meeting later Thursday, but the bank was widely expected to keep its benchmark interest rate steady at 0.50% and leave the size of its asset purchase program unchanged.
The euro edged higher against the U.S. dollar and the yen, with EUR/USD easing up 0.12% to 1.2614 and EUR/JPY climbing 0.23% to 98.99.
The euro was little changed after official data showed that the euro zone’s gross domestic product contracted by 0.2% in the second quarter, in line with expectations and unchanged from a preliminary estimate.
EUR/GBP hit 0.7940 during European morning trade, the pair’s highest since Tuesday; the pair subsequently consolidated at 0.7929, easing up 0.08%.
The pair was likely to find support at 0.7886, Wednesday’s low and resistance at 0.7955, the high of August 31 and an almost one-month high.
Demand for the single currency has been underpinned in recent weeks by expectations that the ECB is set to announce more details of measures to help stabilize the region’s sovereign debt markets at its post-policy meeting press conference later in the day.
Speculation mounted on Wednesday, after Bloomberg reported that the ECB is planning unlimited purchases of government bonds with maturities of up to three years, without setting bond yield targets.
France saw bond yields fall at an auction of five- and 10-year government bonds on Thursday, while Spain also saw borrowing costs decline at an auction of two-, three- and four-year government bonds.
Meanwhile, the Bank of England was to hold its monthly policy-setting meeting later Thursday, but the bank was widely expected to keep its benchmark interest rate steady at 0.50% and leave the size of its asset purchase program unchanged.
The euro edged higher against the U.S. dollar and the yen, with EUR/USD easing up 0.12% to 1.2614 and EUR/JPY climbing 0.23% to 98.99.
The euro was little changed after official data showed that the euro zone’s gross domestic product contracted by 0.2% in the second quarter, in line with expectations and unchanged from a preliminary estimate.