Investing.com – The euro tumbled to an eight-day low against the pound on Tuesday, after U.K. services sector activity jumped in March, renewing expectations of a near term rate rise and after Moody’s downgraded Portugal’s sovereign debt rating.
EUR/GBP hit 0.8729 during European morning trade, the pair’s lowest since March 24; the pair subsequently consolidated at 0.8732, tumbling 0.94%.
The pair was likely to find support at 0.8662, the low of March 24 and resistance at 0.8839, Monday’s high.
The Markit/CIPS services purchasing managers index surged to a 13-month high of 57.1 in March from an unrevised 52.6 in February, confounding expectations for a dip to 52.5.
Markit said that based on March's figures it now believed U.K. gross domestic product grew 0.8% in the first quarter, up from a 0.5% estimate after February's PMI data for the services, manufacturing and construction sectors.
The strength of first-quarter GDP is seen as a key factor in whether the Bank of England will hike interest rates in the coming months.
However, Markit economist Paul Smith said it was unclear whether March's data was a blip or marked the resumption of solid growth in the services sector.
Meanwhile, the euro was hit after Moody's Investors Service downgraded Portugal's sovereign debt rating from A3 to Baa1 and warned that it expected the country to have to seek outside help to resolve its debt problems.
The pound was also higher against the U.S. dollar, with GBP/USD surging 0.66% to hit 1.6236.
Also Tuesday, official data showed that retail sales in the euro zone fell unexpectedly February.
EUR/GBP hit 0.8729 during European morning trade, the pair’s lowest since March 24; the pair subsequently consolidated at 0.8732, tumbling 0.94%.
The pair was likely to find support at 0.8662, the low of March 24 and resistance at 0.8839, Monday’s high.
The Markit/CIPS services purchasing managers index surged to a 13-month high of 57.1 in March from an unrevised 52.6 in February, confounding expectations for a dip to 52.5.
Markit said that based on March's figures it now believed U.K. gross domestic product grew 0.8% in the first quarter, up from a 0.5% estimate after February's PMI data for the services, manufacturing and construction sectors.
The strength of first-quarter GDP is seen as a key factor in whether the Bank of England will hike interest rates in the coming months.
However, Markit economist Paul Smith said it was unclear whether March's data was a blip or marked the resumption of solid growth in the services sector.
Meanwhile, the euro was hit after Moody's Investors Service downgraded Portugal's sovereign debt rating from A3 to Baa1 and warned that it expected the country to have to seek outside help to resolve its debt problems.
The pound was also higher against the U.S. dollar, with GBP/USD surging 0.66% to hit 1.6236.
Also Tuesday, official data showed that retail sales in the euro zone fell unexpectedly February.