Investing.com - The euro was trading within striking distance of a two-week low against the pound on Tuesday, as uncertainty over whether Spain will request a bailout and concerns over prospects for global growth weighed on demand for the shared currency.
EUR/GBP hit 0.7936 during European early afternoon trade, the pair's lowest since September 7; the pair subsequently consolidated at 0.7960, slipping 0.14%.
The pair was likely to find support at 0.7924, the low of September 7 and resistance at 0.7995, Monday's high
Earlier in the session, Spain saw borrowing costs rise at an auction of short-term debt, reflecting lingering uncertainty over whether Madrid will request a full scale sovereign bailout.
Spain's Treasury sold EUR1.4 billion of three-month bills, at an average yield of 1.20%, up from 0.94% at the last auction of this type.
It also sold EUR2.6 billion of six-month bills at a yield of 2.21%, up from 2.02% previously.
On Thursday Madrid is to present its draft budget for next year and announce structural reforms, while the results of bank stress tests are due on Friday. In addition, ratings agency Moody’s is expected to complete a ratings review on Spain later this week.
Market sentiment was also hit by German media reports that lawyers for the German central bank are examining the legality of the European Central Bank's bond purchasing program, setting the stage for a possible legal challenge.
Meanwhile, concerns over Greece continued to weigh, as Athens prepared to present a package of spending cuts at the end of this week, amid fears that the country’s budget shortfall could be larger than expected.
In the U.K., senior Bank of England policymaker Paul Fisher said earlier that the bond buying scheme announced by the ECB earlier this month appears to have calmed financial markets and could lay the foundations to resolve the region's debt crisis.
The euro was also lower against the U.S. dollar and the yen, with EUR/USD slipping 0.17% to 1.2908 and EUR/JPY down 0.26% to 100.39.
Earlier Tuesday, sentiment on the euro had been boosted following the release of encouraging German consumer confidence data.
The forward looking German GfK consumer sentiment index was unchanged at 5.9 for October, in line with expectations. The economic expectations component of the index rose to minus 17.2 points in September from minus 18.9 points in August.
EUR/GBP hit 0.7936 during European early afternoon trade, the pair's lowest since September 7; the pair subsequently consolidated at 0.7960, slipping 0.14%.
The pair was likely to find support at 0.7924, the low of September 7 and resistance at 0.7995, Monday's high
Earlier in the session, Spain saw borrowing costs rise at an auction of short-term debt, reflecting lingering uncertainty over whether Madrid will request a full scale sovereign bailout.
Spain's Treasury sold EUR1.4 billion of three-month bills, at an average yield of 1.20%, up from 0.94% at the last auction of this type.
It also sold EUR2.6 billion of six-month bills at a yield of 2.21%, up from 2.02% previously.
On Thursday Madrid is to present its draft budget for next year and announce structural reforms, while the results of bank stress tests are due on Friday. In addition, ratings agency Moody’s is expected to complete a ratings review on Spain later this week.
Market sentiment was also hit by German media reports that lawyers for the German central bank are examining the legality of the European Central Bank's bond purchasing program, setting the stage for a possible legal challenge.
Meanwhile, concerns over Greece continued to weigh, as Athens prepared to present a package of spending cuts at the end of this week, amid fears that the country’s budget shortfall could be larger than expected.
In the U.K., senior Bank of England policymaker Paul Fisher said earlier that the bond buying scheme announced by the ECB earlier this month appears to have calmed financial markets and could lay the foundations to resolve the region's debt crisis.
The euro was also lower against the U.S. dollar and the yen, with EUR/USD slipping 0.17% to 1.2908 and EUR/JPY down 0.26% to 100.39.
Earlier Tuesday, sentiment on the euro had been boosted following the release of encouraging German consumer confidence data.
The forward looking German GfK consumer sentiment index was unchanged at 5.9 for October, in line with expectations. The economic expectations component of the index rose to minus 17.2 points in September from minus 18.9 points in August.