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Forex - Euro comes off lows vs. pound, dollar

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Investing.com - The euro pulled back from multi-month lows against the pound and the dollar on Thursday after Italy's economy minister said he had no information on a possible sovereign ratings downgrade.

EUR/GBP pulled away from 0.8416, the pair's lowest since January 24 to hit 0.8464 during European morning trade, rising 0.20%.

The pair was likely to find support at 0.8390, the low of January 24 and resistance at 0.8484, Wednesday's high.

The euro found support after Italian Economy Minister Vittorio Grilli said he had no knowledge of an imminent downgrade of Italy's sovereign debt rating by Moody's.

The comments came amid speculation over a possible downgrade by Moody's after ratings agency Fitch cut Italy's rating earlier this month.

Meanwhile, talks in Italy aimed at forming a coalition continued amid growing doubts over whether a stable government can be formed.

Sentiment on the single currency remained fragile as banks in Cyprus prepared to open for the first time in almost two weeks with strict capital controls in place.

Cypriot banks have been closed since March 16 amid fears of a bank run while bailout talks were under way.

Elsewhere, official data showing that the number of people unemployed in Germany rose by 13,000 in March, compared to expectations for a decline of 4,000.

This offset a report showing an unexpected increase in German retail sales in February.

The pound hit two-month highs against the euro earlier after official data showed that U.K. service output rose 0.3% in January, the biggest rise since August, easing concerns over the threat of a triple-dip recession.

The euro pushed higher against the dollar, with EUR/USD easing up 0.14% to 1.2798, after touching session lows of 1.2755.

The U.S. was to release revised data on fourth quarter growth, official data on initial jobless claims and a report on manufacturing activity in Chicago later in the trading day.

The euro eased against the yen but remained close to one-month lows, with EUR/JPY down 0.31% to 94.16, up from session lows of 93.88.

The yen was broadly firmer on Thursday but gains looked likely to remain limited as expectations for more aggressive easing measures by the Bank of Japan remained intact.

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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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