Investing.com – The euro erased gains against the pound on Tuesday, pulling back from a two-week high, after official data showed that the U.K. economy grew in line with expectations in the second quarter.
EUR/GBP pulled back from 0.8883, the pair’s highest since July 11, to hit 0.8833 during European morning trade, unchanged on the day.
The pair was likely to find support at 0.8796, Monday’s low and resistance at 0.8891, the high of July 11.
The Office for National Statistics said gross domestic product grew by just 0.2% in the second quarter, after rising by 0.5% in the previous quarter, bringing the annualized rate of growth to 0.7%, the lowest since the first quarter of 2010.
The statistics offices said that factors such as the additional public holiday for the Royal Wedding and the after-effects of the Japanese tsunami may have subtracted as much a 0.5% from overall growth in the second quarter.
The report said industrial output fell 1.4% on the quarter, while the service sector expanded by 0.5%.
The lackluster data was seen as lending support to expectations that the Bank of England will hold interest rates at record lows well into 2012.
Meanwhile, the pound was up against the weaker U.S. dollar, with GBP/USD rising 0.69% to hit 1.6387.
The greenback remained broadly lower as talks between U.S. President Barack Obama and congressional leaders on raising the U.S.’s USD14.3 trillion debt ceiling appeared to be making little progress.
EUR/GBP pulled back from 0.8883, the pair’s highest since July 11, to hit 0.8833 during European morning trade, unchanged on the day.
The pair was likely to find support at 0.8796, Monday’s low and resistance at 0.8891, the high of July 11.
The Office for National Statistics said gross domestic product grew by just 0.2% in the second quarter, after rising by 0.5% in the previous quarter, bringing the annualized rate of growth to 0.7%, the lowest since the first quarter of 2010.
The statistics offices said that factors such as the additional public holiday for the Royal Wedding and the after-effects of the Japanese tsunami may have subtracted as much a 0.5% from overall growth in the second quarter.
The report said industrial output fell 1.4% on the quarter, while the service sector expanded by 0.5%.
The lackluster data was seen as lending support to expectations that the Bank of England will hold interest rates at record lows well into 2012.
Meanwhile, the pound was up against the weaker U.S. dollar, with GBP/USD rising 0.69% to hit 1.6387.
The greenback remained broadly lower as talks between U.S. President Barack Obama and congressional leaders on raising the U.S.’s USD14.3 trillion debt ceiling appeared to be making little progress.