Sterling rose against a struggling euro in light trade on Monday as the single currency was hampered by debt worries, but gains for the pound were slight, with UK exposure to the eurozone hampering the rally. Traders said year-end trading conditions had set in with light volumes going through, making for thin liquidity. Price movements on the day were minimal, with many investors on the sidelines until the new year.
The euro is expected to remain vulnerable into the new year as investors await more aggressive solutions from European leaders to address debt concerns in the region. The Bank of England's semi-annual Financial Stability Report released last week showed Britain's banks remained vulnerable to increased European sovereign debt turmoil.
The euro traded down around 0.3 percent against sterling at 84.60 pence in afternoon trade, having risen to its strongest in nearly a month on Friday above 85.50. Technical analysts said the outlook was negative for the euro while under the 200-day moving average at 85.12.
Versus the dollar, sterling was close to flat for most of the day, trading at $1.5555, holding above a three-month low hit on Friday of $1.5454. Next key support was seen at $1.5265, the 50 percent retracement level of the pound's rally from 1.4230/1.6300.
Comments
Comments are closed for this article.