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Forex – EUR/GBP surges to 7-month high as pound struggles

Published 10/25/2010, 06:58 AM
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Investing.com – The euro was up against the pound on Monday, surging to a 7-month high, as the pound struggled ahead of the release of quarterly U.K. GDP data on Tuesday.

EUR/GBP hit 0.8942 during European early afternoon trade, the pair’s highest since March 31; the pair subsequently consolidated at 0.8917, gaining 0.24%.

The pair was likely to find support at 0.8847, last Friday’s low and resistance at 0.8998, the high of March 30.

Earlier Monday, industry data showed that mortgage approvals in the U.K. fell more-than-expected in September, declining to their lowest level since March 2009.

In a report, the British Banker's Association said that the number of new mortgages approved in September fell to 31.1K, after declining to 31.8K in August.

Analysts had expected the number of mortgage approvals to fall to 31.6K in September.

Commenting on the report, BBA statistics director, David Dooks said, “Demand for new mortgages remains low despite more properties on the market and falling house prices.” He added, “Business borrowing continues to reflect weak demand combined with companies reducing gearing by repaying bank borrowing."

Meanwhile, the pound was up against the U.S. dollar, with GBP/USD gaining 0.37% to hit 1.5741.

Later in the day, the U.S. was to release industry data on existing home sales.

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