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Forex - EUR/GBP off 2-month low after SNB intervention

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Forexpros - The euro rebounded from a two-month low against the pound on Wednesday, after the Swiss National Bank announced measures to curb the franc's recent gains against the euro and the U.S. dollar, lifting the single currency across the board.

EUR/GBP pulled back from 0.8693, the pair's lowest since May 31; to hit 0.8737 during European late morning trade, gaining 0.23%.

The pair was likely to find support at 0.8665, the low of May 31 and resistance at 0.8769, Tuesday's high.

Switzerland's central bank narrowed its three-month Libor rate to 0.25% from 0.75% earlier, saying the currency was "massively overvalued" adding that it "won't tolerate" a "tightening of monetary conditions" and therefore was taking measures against the franc.

But the euro's gains were capped following a report showing that activity in the U.K. services sector grew at its fastest pace in four months in July.

The Markit/CIPS services purchasing managers' index rose to 55.4 in July from 53.9 in June, confounding expectations for a slowdown to 53.2.

Markit said that taken together with Monday's manufacturing PMI, the data indicated the economy grew by 0.5% in the three months to July, a marked improvement on the 0.2% growth recorded from April to June.

The euro was also higher against the U.S. dollar, with EUR/USD advancing 0.82% to hit 1.4320.

Later in the day, payroll processing firm ADP was publish a report on U.S. non-farm payrolls, while the U.S. Institute of Supply Management was to publish data on service sector growth.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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