Forexpros - The euro was hovering close to a three-month low against the pound on Tuesday, as a combination of worries about the economic outlook for the euro zone and high Spanish borrowing costs weighed. EUR/GBP hit 0.8234 during European morning trade, the session low; the pair subsequently consolidated at 0.8255, inching up 0.08%. The pair was likely to find short-term support at 0.8229, Friday’s low and a three-month low and resistance at 0.8278, the high of April 5. Concerns over Spain’s high borrowing costs intensified earlier as the yield on 10-year government bonds climbed to 5.8%, the highest level since early December amid fears that the country will be the next in the euro zone to require a bailout. Meanwhile, Spain’s government earlier reiterated its aim to cut the country’s budget deficit to 3% of gross domestic product next year. Sentiment on the euro was also hit after a report showed that investor sentiment in the euro zone dropped this month, after three successive monthly increases. Market research group, Sentix said its index of investor confidence declined by 6.5 points to minus 14.7 in April from March’s reading of minus 8.2. Analysts had expected the index to improve modestly by 0.1 points to minus 8.1 in April. The pound found support after industry data showed that U.K. house prices declined at the slowest pace since June 2010 in March. The Royal Institution of Chartered Surveyors' seasonally adjusted house price balance rose to minus 10 from minus 13 in February, beating forecasts for a more modest rise to minus 12. The report came after robust data on the U.K. manufacturing, construction and service sectors last week eased concerns over the economic outlook. The pound was lower against the U.S. dollar, with GBP/USD shedding 0.30% to hit 1.5842. Also Tuesday, official data showed that French industrial production rose by 0.3% in February, slightly more than expectations for a 0.2% increase, easing concerns over the outlook for the euro zone’s second largest economy.

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