Investing.com - The euro fell to an eight-year low against the pound on Thursday, as sentiment on the single currency weakened ahead of the European Central Bank's press conference later in the day and as expectations for a rate hike in the U.K. boosted demand for sterling.
EUR/GBP fell to lows of 1.696, the weakest since November 2007 and was last at 0.6981, off 0.29% for the day.
The euro slid lower after Greece’s parliament passed harsh austerity measures demanded by the country’s creditors in order to secure a third bailout package.
The vote cleared the way for negotiations on a third bailout package to begin, but also raised doubts over the future of Greek Prime Minister Alexis Tsipras' government after many lawmakers in his left-wing Syriza party voted against the deal.
Tsipras was expected to replace several ministers in a cabinet reshuffle later Thursday.
The eurogroup of euro zone finance ministers were to hold talks on the latest developments in Greece later Thursday.
Ahead of the Greek vote on Wednesday night, the French national assembly voted overwhelmingly in favor of starting negotiations for the third bailout.
Germany’s Bundestag is set to vote on the plan on Friday.
Meanwhile, officials in Brussels were continuing efforts to assemble a €7 billion short-term financing package to keep Greece afloat until the new bailout can be finalized.
The vote came as violent protests erupted in front the Greek parliament in Athens on Wednesday evening contesting the bailout package.
Demand for the pound continued to be underpinned after Bank of England Governor Mark Carney said earlier in the week that the time for the bank to raise rate increases is moving closer.
Sterling was lower against the dollar, with GBP/USD slipping 0.11% to 1.5620.
The dollar remained supported after Federal Reserve Chair Janet Yellen reiterated on Wednesday that the central bank was on track to raise interest rates by the end of the year if the economy continues to evolve as expected.
The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was up 0.29% to six-week highs at 97.56.