Investing.com - The euro erased gains against the pound on Thursday, to hover close to a 22-month low after an auction of Spanish government debt saw the country’s borrowing costs jump.
EUR/GBP pulled back from 0.8136, the session high, to hit 0.8117 during European morning trade, dipping 0.06%.
The pair was likely to find short-term support at 0.8111, Wednesday’s low and a 22-month trough and short-term resistance at 0.8136, the session high.
Spain sold the full target amount of EUR2.5 billion of government bonds in its first debt sale since being downgraded by Standard & Poor’s but at sharply higher yields.
The yield on the country’s five-year bonds rose to 4.96% from 3.69%, while the yield on three-year Spanish bonds climbed to 4.03% from 2.61%.
Market participants were looking ahead to the outcome of the European Central Bank’s policy-setting meeting later in the day, amid pressure on policymakers to resume the bank’s bond purchase program in order to ease pressure on the borrowing costs of vulnerable peripheral euro zone economies.
In the U.K., a report showed that service sector activity expanded at a slower rate than expected in April, falling to the lowest level since November, but the report indicated that the overall outlook remained positive.
The services purchasing managers index fell to 53.3 in April, from 55.3 the previous month, worse than expectations for a decline to 54.6.
Earlier Thursday, industry data showed that U.K. house prices fell unexpectedly in April.
Mortgage lender Nationwide said house prices dropped by a seasonally adjusted 0.2% last month, following March’s steep 1% drop and were 0.9% lower year-on-year. Analysts had expected house prices to rise by 0.5% last month.
The euro was lower against the U.S. dollar but remained fractionally higher against the yen, with EUR/USD shedding 0.22% to hit 1.3128 and EUR/JPY inching up 0.06% to hit 105.50.
Later Thursday, the U.S. was to produce government data on unemployment claims, as well as preliminary data on nonfarm productivity and unit labor costs. In addition, the Institute of Supply Management was to produce a report on service sector growth.
EUR/GBP pulled back from 0.8136, the session high, to hit 0.8117 during European morning trade, dipping 0.06%.
The pair was likely to find short-term support at 0.8111, Wednesday’s low and a 22-month trough and short-term resistance at 0.8136, the session high.
Spain sold the full target amount of EUR2.5 billion of government bonds in its first debt sale since being downgraded by Standard & Poor’s but at sharply higher yields.
The yield on the country’s five-year bonds rose to 4.96% from 3.69%, while the yield on three-year Spanish bonds climbed to 4.03% from 2.61%.
Market participants were looking ahead to the outcome of the European Central Bank’s policy-setting meeting later in the day, amid pressure on policymakers to resume the bank’s bond purchase program in order to ease pressure on the borrowing costs of vulnerable peripheral euro zone economies.
In the U.K., a report showed that service sector activity expanded at a slower rate than expected in April, falling to the lowest level since November, but the report indicated that the overall outlook remained positive.
The services purchasing managers index fell to 53.3 in April, from 55.3 the previous month, worse than expectations for a decline to 54.6.
Earlier Thursday, industry data showed that U.K. house prices fell unexpectedly in April.
Mortgage lender Nationwide said house prices dropped by a seasonally adjusted 0.2% last month, following March’s steep 1% drop and were 0.9% lower year-on-year. Analysts had expected house prices to rise by 0.5% last month.
The euro was lower against the U.S. dollar but remained fractionally higher against the yen, with EUR/USD shedding 0.22% to hit 1.3128 and EUR/JPY inching up 0.06% to hit 105.50.
Later Thursday, the U.S. was to produce government data on unemployment claims, as well as preliminary data on nonfarm productivity and unit labor costs. In addition, the Institute of Supply Management was to produce a report on service sector growth.