Investing.com - The euro edged lower against the pound on Wednesday, re-approaching a two year trough after German business confidence fell again this month and the European Central Bank reiterated its commitment to accommodative monetary policy.
EUR/GBP touched lows of 0.7828 and was last at 0.7834, down 0.05% for the day.
The pair was likely to find support at 0.7809, the low of September 19 and the weakest since August 2012 and resistance at around 0.7875.
Sentiment on the single currency was hit after a report showed that Germany's Ifo business confidence index deteriorated for the fifth successive month in September.
The Ifo economic institute's business climate index fell to 104.7 from 106.3 in August.
It was the lowest level since April 2013 and much weaker than economists’ forecasts for 105.7.
The report came one day after data showed that German private sector output continued to expand in September but growth in the manufacturing sector slowed to a 15 month low.
The data added to fears that the euro zone’s largest economy is losing momentum.
Earlier Wednesday, ECB President Mario Draghi said the bank will keep its monetary policy “accommodative” for as long as needed, and will use every tool at its disposal to fight deflation.
“Monetary policy will remain accommodating for a long time and I can tell you that the Governing Council is unanimous in committing itself to using the tools at its disposal to bring inflation back to just under 2%.”
Interest rates will remain low because they can’t get much lower,” he said.
The ECB unexpectedly cut rates to record lows across the euro zone earlier this month, in a bid to address slowing inflation.
Sterling remained supported as investor focus returned to the outlook for U.K. monetary policy in the wake of last Thursday’s Scottish independence referendum.
Elsewhere, the euro was steady against the dollar with EUR/USD at 1.2848, not far from Monday’s 14 month trough of 1.2815.