Investing.com – The euro surged to a 3-day high against the pound on Thursday as expectations grew that the European Central Bank was set to take decisive steps to halt sovereign debt contagion in the euro zone.
EUR/GBP hit 0.8459 during European afternoon trade, the pair’s highest since November 29; the pair subsequently consolidated at 0.8445, gaining 0.42%.
The pair was likely to find support at 0.8333, Wednesday’s low and resistance at 0.8520, the high of November 29.
Expectations mounted that the ECB would announce plans to keep unlimited liquidity support for banks in place for longer or step up bond purchases at its press conference, due later Thursday.
Earlier in the day, the bank left its benchmark interest rate unchanged at 1.0%, in line with expectations.
The single currency was also boosted after Spain successfully auctioned EUR 2.5 billion of Treasury bills, in the country’s first bond auction since Ireland’s bailout.
The threat of sovereign debt contagion in the euro zone has hit the pound due the extensive exposure of U.K. banks to Irish government debt and also due in large part to the volume of U.K. exports to the 16-nation economic zone.
The euro was also up against the U.S. dollar, with EUR/USD gaining 0.14% to hit 1.3157.
Earlier Thursday, data showed that the U.K. construction PMI rose unexpectedly in November, but remained close to an 8-month low and analysts said the sector was likely to make a much smaller contribution to growth in economic output in the final quarter than it did earlier in the year.
EUR/GBP hit 0.8459 during European afternoon trade, the pair’s highest since November 29; the pair subsequently consolidated at 0.8445, gaining 0.42%.
The pair was likely to find support at 0.8333, Wednesday’s low and resistance at 0.8520, the high of November 29.
Expectations mounted that the ECB would announce plans to keep unlimited liquidity support for banks in place for longer or step up bond purchases at its press conference, due later Thursday.
Earlier in the day, the bank left its benchmark interest rate unchanged at 1.0%, in line with expectations.
The single currency was also boosted after Spain successfully auctioned EUR 2.5 billion of Treasury bills, in the country’s first bond auction since Ireland’s bailout.
The threat of sovereign debt contagion in the euro zone has hit the pound due the extensive exposure of U.K. banks to Irish government debt and also due in large part to the volume of U.K. exports to the 16-nation economic zone.
The euro was also up against the U.S. dollar, with EUR/USD gaining 0.14% to hit 1.3157.
Earlier Thursday, data showed that the U.K. construction PMI rose unexpectedly in November, but remained close to an 8-month low and analysts said the sector was likely to make a much smaller contribution to growth in economic output in the final quarter than it did earlier in the year.