Forex - EUR/GBP higher on Greece hopes, China easing

Published 02/20/2012, 05:44 AM
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Investing.com - The euro was higher against the pound on Monday, as sentiment on the single currency was boosted by expectations that an agreement on a second bailout for Greece was close to being reached.

EUR/GBP hit 0.8347 during European morning trade, the pair’s highest since February 15; the pair subsequently consolidated at 0.8345, gaining 0.53%.

The pair was likely to find support at 0.8309, the session low and resistance at 0.8401, the high of February 15.

On Friday, the leaders of Germany, Italy and Greece expressed optimism that an agreement on a second bailout and debt restructuring deal for Greece would be reached at a meeting of euro zone finance ministers in Brussels later Monday.

Speaking ahead of the meeting earlier, Greek Finance Minister Evangelos Venizelos said negotiations would continue until the last minute but added that Greece has met all the conditions demanded by its creditors.

“We expect today to close a long period of uncertainty that has not been to the benefit of either the Greek economy or the euro area”, Venizelos said.

Risk appetite was also bolstered after China’s central bank announced a decision to cut the reserve requirement ratios of major commercial lenders in an attempt to boost liquidity and spur growth in the world’s second largest economy.

Meanwhile, trade was expected to remain subdued throughout the day, with markets in the U.S. remaining closed for the Presidents Day holiday.

The euro was higher against the U.S. dollar, with EUR/USD advancing 0.66% to hit 1.3225.

Also Monday, a report by U.K. property website Rightmove showed that average asking prices for houses jumped 4.1% in February, the highest monthly increase since April 2002, indicating increasing confidence in the housing market.


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