Investing.com - The euro edged lower against the pound on Monday, as optimism sparked by an agreement on measures to address the debt crisis in the euro zone faded, while weak economic data also weighed.
EUR/GBP pulled back from 0.8077, the session high, to hit 0.8055 during European morning trade, dipping 0.08%.
The pair was likely to find support at 0.8008, Friday’s low and resistance at 0.8093, Friday’s high and a seven-day high.
At the end of a two-day summit on Friday, European leaders agreed to use the euro zone’s bailout funds to support struggling banks directly, without adding to national debt, and to purchase government debt in order to keep borrowing costs down.
Leaders also agreed to set up a joint banking supervisory body for the euro area.
Markets rallied following the announcement, as expectations for concrete progress on dealing with the crisis had faded in the run up to the talks.
But market sentiment cooled, amid questions over the long-term effectiveness of the measures in addressing the root causes of the euro zone’s debt crisis and uncertainty over how and when the measures can be implemented.
Meanwhile, official data showed that the unemployment rate in the single currency bloc rose to a record high 11.1% in May, up from 11.0% in April.
A separate report showed that the final reading of the euro zone manufacturing purchasing managers’ index came in at 45.1 in June, above the preliminary estimate of 44.8 and holding steady at its lowest reading since June 2009.
In the U.K., data showed that manufacturing activity improved in June, but conditions remained fragile.
The U.K. manufacturing PMI rose to 48.6 in June from a reading of 45.9 in May, but remained below the 50 level which separates contraction from expansion. Analysts had expected a reading of 46.7.
The EUR/GBP pair was expected to remain rangebound ahead of the outcome of monetary policy meetings by both the European Central Bank and the Bank of England later in the week.
The euro was weaker against the U.S. dollar and the yen, with EUR/USD shedding 0.28% to hit 1.2625 and EUR/JPY down 0.58% to 100.45.
Later in the day, the Institute for Supply Management was to release a report on activity in the U.S. manufacturing sector.
EUR/GBP pulled back from 0.8077, the session high, to hit 0.8055 during European morning trade, dipping 0.08%.
The pair was likely to find support at 0.8008, Friday’s low and resistance at 0.8093, Friday’s high and a seven-day high.
At the end of a two-day summit on Friday, European leaders agreed to use the euro zone’s bailout funds to support struggling banks directly, without adding to national debt, and to purchase government debt in order to keep borrowing costs down.
Leaders also agreed to set up a joint banking supervisory body for the euro area.
Markets rallied following the announcement, as expectations for concrete progress on dealing with the crisis had faded in the run up to the talks.
But market sentiment cooled, amid questions over the long-term effectiveness of the measures in addressing the root causes of the euro zone’s debt crisis and uncertainty over how and when the measures can be implemented.
Meanwhile, official data showed that the unemployment rate in the single currency bloc rose to a record high 11.1% in May, up from 11.0% in April.
A separate report showed that the final reading of the euro zone manufacturing purchasing managers’ index came in at 45.1 in June, above the preliminary estimate of 44.8 and holding steady at its lowest reading since June 2009.
In the U.K., data showed that manufacturing activity improved in June, but conditions remained fragile.
The U.K. manufacturing PMI rose to 48.6 in June from a reading of 45.9 in May, but remained below the 50 level which separates contraction from expansion. Analysts had expected a reading of 46.7.
The EUR/GBP pair was expected to remain rangebound ahead of the outcome of monetary policy meetings by both the European Central Bank and the Bank of England later in the week.
The euro was weaker against the U.S. dollar and the yen, with EUR/USD shedding 0.28% to hit 1.2625 and EUR/JPY down 0.58% to 100.45.
Later in the day, the Institute for Supply Management was to release a report on activity in the U.S. manufacturing sector.