Forex Pros – The euro trimmed losses against the pound on Monday, easing up from a daily low, as expectations for a near term interest rate hike by the European Central Bank supported the currency, following a downgrade of Greece’s debt rating.
EUR/GBP clawed back up from 0.8572, the daily low, to hit 0.8593 during European early afternoon trade, dipping 0.04%.
The pair was likely to find support at 0.8563, Friday’s low and resistance at 0.8652, the high of January 28.
Earlier in the day, ratings agency Moody’s downgraded Greece’s sovereign debt to B1 from Ba1, with a negative outlook, saying the likelihood that the country will default has risen since June and that it may not meet solvency criteria for official support after 2013.
The euro has remained supported after ECB president Jean-Claude Trichet said Thursday the bank may raise interest rates next month.
The prospect of an interest rate increase by the ECB could dampen expectations for a rate hike by the Bank of England in the coming months, if growth in the euro zone, the U.K.’s largest trading partner, was to moderate.
The euro was also higher against the U.S. dollar, with EUR/USD rising 0.30% to hit 1.4029.
Later in the day, ECB head Jean-Claude Trichet was to speak at a public engagement
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