Forex - EUR/GBP hits 3-day high as E.Z. fears ease

Published 11/03/2011, 06:20 AM
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Investing.com - The euro edged up to a three-day high against the pound on Thursday, as signs that the euro zone will be capable of overcoming a potential Greek exit supported demand for the single currency.

EUR/GBP pulled back from 0.8596, the daily low to hit 0.8596 during European morning trade, rising 0.10%.

The pair was likely to find support at 0.8577, the low of September 30 and resistance at 0.8685, the high of September 13.

Market sentiment was slightly lifted after European officials said that the single currency bloc will survive, even if Greece's controversial referendum results in a call to exit the euro zone.

Investors also eyed the Greek government's confidence vote on Friday, speculating that the bailout referendum will be canceled if current Prime Minister George Papandreou loses the vote.

The single currency had come under pressure earlier, as French and German leaders warned Athens that it would not receive any more European aid until it decides whether it wants to stay in the euro zone. 

Meanwhile, a report showed that activity in the U.K. service sector moderated in October but growth remained above the level that separates expansion from contraction for the tenth successive month.

Market research group Markit said the services purchasing managers' index declined to 51.3 in October from 52.9 the previous month.

Elsewhere, sterling was up against the U.S. dollar with GBP/USD rising 0.29%, to hit 1.5996.

Later in the day, the European Central Bank was to hold its first policy setting meeting chaired by new head, Mario Draghi. Meanwhile, the U.S. was to produce its weekly report on initial jobless claims as well as a report on service sector activity from the Institute of Supply Management.

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