News & Analysis

Forex - EUR/GBP steady as Greece talks watched

Forexpros – The euro was steady against the pound on Wednesday, as investors remained wary of pushing the single currency too high in the absence of an agreement on a debt restructuring deal for Greece.

EUR/GBP hit 0.8349 during European morning trade, the session high; the pair subsequently consolidated at 0.8342, inching up 0.05%.

The pair was likely to find support at 0.8282, Tuesday’s low and resistance at 0.8352, Tuesday’s high.

Greek Prime Minister Lucas Papademos was to hold talks with the leaders of Greece's three political parties at 1300GMT to discuss the terms of new austerity measures being demanded in return for a second bailout worth EUR130 billion to prevent the country from defaulting.

The deeply unpopular measures include billions of euros in government spending reductions, as well as cuts to pensions and wages.

Greece needs to finalize a debt restructuring deal by early March as part of an agreement to receive a second bailout package.

The euro was largely unchanged after official data showed that German exports fell at their fastest rate in nearly three years in December, narrowing the trade surplus to EUR13.9 billion from a revised EUR14.9 billion the previous month.

The data sparked concerns that the euro zone’s largest economy may have contracted more than originally estimated in the fourth quarter of 2011.

Elsewhere, the Bank of France said earlier that its economy will not grow at all in the first quarter of this year.

The euro was fractionally higher against the U.S. dollar, with EUR/USD inching up 0.08% to hit 1.3269.

Meanwhile, investors were looking ahead to the Bank of England’s policy decision on Thursday, amid expectations that policymakers will implement a further GBP50 billion of quantitative easing in order to shore up growth in the faltering U.K. economy.



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