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Forex - EUR/GBP hits 8-day high after weak U.K. PMI data

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Forex Pros - The euro advanced to an eight-day high against the pound on Wednesday, after official data showed that manufacturing activity in the U.K. grew at its slowest rate in 20 months in May.

EUR/GBP hit 0.8795 during European morning trade, the pair's highest since May 20; the pair subsequently consolidated at 0.8781, gaining 0.33%.

The pair was likely to find support at 0.8665, Tuesday's low and resistance at 0.8837, the high of May 20.

The Markit/CIPS manufacturing purchasing managers' index fell to 52.1 last month from a downwardly revised 54.4 in April, well below the 54.1 forecast decline.

The worst reading since September 2009 was blamed on a weaker domestic market, particularly for consumer goods, and the slowest growth in export orders in eight months. Extra public holidays also reduced activity.

But the single currency's gains were capped after German media outlets reported it is now certain that the International Monetary Fund will not pay its share of a fifth tranche of aid to Greece at the end of June.

The euro edged higher against the U.S. dollar, with EUR/USD easing up 0.07% to hit 1.4407.

Also Wednesday, revised data showed that the euro zone manufacturing PMI fell to a seven-month low of 54.6 last month, down from an initial estimate of 54.8.

The report said that in all the countries covered, the PMI data "signaled a broad-based slowdown in the pace of recovery, with headline [indexes] retreating from their April levels."

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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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