Sterling fell to a six-week low versus the euro on Monday, hit by market talk of heavy selling by a UK clearing bank and concerns over Britain's fragile economic recovery. Traders cited speculation that the order was related to the UK's contribution to the European Union's agricultural budget, while the pound also suffered from a hangover from weak data on the UK services and housing sectors last week.
At 1502 GMT, the euro traded 0.1 percent higher on the day at 83.58 pence after rallying to 83.90, its highest level since late July and briefly poking above its 100-day moving average around 83.84 pence. A close above that level is expected to open the door to more euro gains.
The euro/sterling buy order took slapped sterling cross the board, pushing it 0.3 percent lower to $1.5400. Sterling had initially rallied to $1.5490 as riskier assets were boosted in the wake of a US employment report on Friday that was less dire than expected. But those gains were fleeting as the UK currency broke below its 200- and 55-day moving averages at $1.5418 and $1.5408, respectively.
Technical analysts said next key support was at $1.5322, the 38.2 percent retracement of the May to August rally. A string of soft data releases last week reignited concerns over the fragility of Britain's economic recovery, prompting expectations of pressure on sterling against most of its major crosses. "Taking a look at sterling versus the Aussie dollar, the rand, the Swedish and Norwegian crowns, there is little to suggest other than a sell sterling rally mentality.
Comments
Comments are closed.