Investing.com – The euro was up for the third day against the pound on Tuesday, rising to a seven-day high after European Central Bank policymakers said the bank could raise rates to tame inflation.
EUR/GBP hit 0.8467 during European afternoon trade, the pair’s highest since February 11; the pair subsequently consolidated at 0.8452, gaining 0.27%.
The pair was likely to find support at 0.8358, the low February 18 and resistance at 0.8527, the high of February 10.
Earlier Tuesday, ECB council member Yves Mersch said bank officials may toughen their language on inflation when ECB policy members meet next week, indicating a readiness to raise interest rates in coming months.
With the economy strengthening and inflation in breach of the ECB’s 2% limit, policy makers would “inevitably” have to “rebalance our monetary policy stance,” Mersch said, without giving a timeframe.
Meanwhile, ECB Executive Board member Juergen Stark said the central bank would raise interest rates if necessary to keep inflation in check.
Speaking at an event in Frankfurt Monday night, Mr. Stark said, “We’re prepared to act decisively and immediately if needed. The objective is pretty clear. In order not to risk un-anchoring inflation expectations, we have to change the monetary policy stance if need be.”
Meanwhile, the euro was down against the U.S. dollar, with EUR/USD slipping 0.08% to hit 1.3667.
Earlier in the day, a report from the U.K. National Statistics Office showed that the British government posted the biggest budget surplus in January since July 2008, as government revenue surged in the biggest tax-collection month of the year.
EUR/GBP hit 0.8467 during European afternoon trade, the pair’s highest since February 11; the pair subsequently consolidated at 0.8452, gaining 0.27%.
The pair was likely to find support at 0.8358, the low February 18 and resistance at 0.8527, the high of February 10.
Earlier Tuesday, ECB council member Yves Mersch said bank officials may toughen their language on inflation when ECB policy members meet next week, indicating a readiness to raise interest rates in coming months.
With the economy strengthening and inflation in breach of the ECB’s 2% limit, policy makers would “inevitably” have to “rebalance our monetary policy stance,” Mersch said, without giving a timeframe.
Meanwhile, ECB Executive Board member Juergen Stark said the central bank would raise interest rates if necessary to keep inflation in check.
Speaking at an event in Frankfurt Monday night, Mr. Stark said, “We’re prepared to act decisively and immediately if needed. The objective is pretty clear. In order not to risk un-anchoring inflation expectations, we have to change the monetary policy stance if need be.”
Meanwhile, the euro was down against the U.S. dollar, with EUR/USD slipping 0.08% to hit 1.3667.
Earlier in the day, a report from the U.K. National Statistics Office showed that the British government posted the biggest budget surplus in January since July 2008, as government revenue surged in the biggest tax-collection month of the year.