Investing.com - The euro fell to a three-week low against the pound on Thursday, as uncertainty over whether Spain will request a bailout weighed on the single currency ahead of the country’s budget announcement later in the session.
EUR/GBP hit 0.7924 during European early afternoon trade, the pair’s lowest since September 6; the pair subsequently consolidated at 0.7939, shedding 0.30%.
The pair was likely to find support at 0.7906, the low of September 6 and resistance at 0.7965, the session high.
Spain’s government was due to unveil its draft budget statement for 2013, amid ongoing speculation over whether Madrid will seek a full-scale sovereign bailout, which would trigger the European Central Bank’s bond buying program.
Italy saw borrowing costs ease at an auction of government bonds earlier, with the yield on 10-year bonds falling to 5.24% from 5.82% and the yield on five-year bonds falling to 4.09%, down from 4.73%.
The pound found support after the Office for National Statistics said U.K. gross domestic product contracted by 0.4% in the three months to June, up from the preliminary estimate of a 0.5% decline.
The annualized rate of decline remained unrevised 0.5% in the second quarter, in line with expectations.
A separate report showed that the U.K.’s current account deficit widened to a record-high GBP20.8 in the second quarter, up from a revised GBP15.4 billion in the three months to March.
Economists had expected the current account deficit to narrow to GBP12.4 billion.
The euro was also lower against the U.S. dollar and the yen, with EUR/USD dipping 0.08% to 1.2863 and EUR/JPY down 0.15% to 99.92.
Later in the day, the U.S. was to publish its weekly government report on initial jobless claims, as well as data on pending home sales and durable goods orders.
EUR/GBP hit 0.7924 during European early afternoon trade, the pair’s lowest since September 6; the pair subsequently consolidated at 0.7939, shedding 0.30%.
The pair was likely to find support at 0.7906, the low of September 6 and resistance at 0.7965, the session high.
Spain’s government was due to unveil its draft budget statement for 2013, amid ongoing speculation over whether Madrid will seek a full-scale sovereign bailout, which would trigger the European Central Bank’s bond buying program.
Italy saw borrowing costs ease at an auction of government bonds earlier, with the yield on 10-year bonds falling to 5.24% from 5.82% and the yield on five-year bonds falling to 4.09%, down from 4.73%.
The pound found support after the Office for National Statistics said U.K. gross domestic product contracted by 0.4% in the three months to June, up from the preliminary estimate of a 0.5% decline.
The annualized rate of decline remained unrevised 0.5% in the second quarter, in line with expectations.
A separate report showed that the U.K.’s current account deficit widened to a record-high GBP20.8 in the second quarter, up from a revised GBP15.4 billion in the three months to March.
Economists had expected the current account deficit to narrow to GBP12.4 billion.
The euro was also lower against the U.S. dollar and the yen, with EUR/USD dipping 0.08% to 1.2863 and EUR/JPY down 0.15% to 99.92.
Later in the day, the U.S. was to publish its weekly government report on initial jobless claims, as well as data on pending home sales and durable goods orders.