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Forex - EUR/GBP steady after weak euro zone jobs data

Published 10/31/2012, 06:37 AM
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Investing.com - The euro remained steady against the pound on Wednesday, after official data showed that the unemployment rate in the euro zone rose to a new record high in September, adding to concerns over the impact of the debt crisis in the region.

EUR/GBP hit 0.8072 during European morning trade, the session high; the pair subsequently consolidated at 0.8065, inching up 0.04%.

The pair was likely to find support at 0.8039, Tuesday’s low and resistance at 0.8097, the high of October 25.

Eurostat said the unemployment rate in the bloc climbed to 11.6% in September, up from an upwardly revised 11.5% in August. Analysts had expected the jobless rate to remain unchanged at 11.5%.

A separate report showed that consumer price inflation in the euro zone rose 2.5% in October, easing from September’s 2.6% reading.

The rate remains above the European Central Bank's target of near but just below 2%.

The single currency remained supported after official data earlier showed that German retail sales rose 1.5% in September, the fastest pace since June 2011, easily beating expectations for a 0.3% increase.

Meanwhile, investors continued to await any sign that Spain is preparing to request a bailout, which would activate a bond purchasing program by the European Central Bank, aimed at lowering the borrowing costs of distressed euro zone states.

Sentiment on sterling remained underpinned after stronger than expected retail sales data from the Confederation of British Industry on Tuesday dampened expectations for more easing by the Bank of England and fuelled hopes for a sustained economic recovery.

The euro was higher against the U.S. dollar and the yen, with EUR/USD up 0.31% to 1.2997 and EUR/JPY rising 0.54% to 103.74.

Euro zone finance ministers were to hold a conference call later in the day to discuss Greece’s progress on meeting austerity targets, but no decision on when the country will receive the next tranche of its bailout was expected.



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