Forexpros - The euro inched higher against the pound on Tuesday, but gains were limited amid caution ahead of the upcoming European Central Bank policy setting meeting on Thursday. EUR/GBP hit 0.7943 during European morning trade, the pair’s highest since Friday; the pair subsequently consolidated at 0.7933, gaining 0.09%. The pair was likely to find support at 0.7901, the low of August 30 and resistance at 0.7955, Friday’s high and an almost one-month high. Demand for the single currency continued to be underpinned by expectations that the ECB will announce details of measures to help stabilize the region’s sovereign debt markets after its policy setting meeting on Thursday. The euro was little changed after ratings agency Moody’s lowered its outlook on the European Union's triple- A rating to negative, from stable. Investors were also anticipating the Federal Reserve’s next policy meeting, amid speculation over how close the U.S. central bank is to implementing another round of easing, after Fed Chairman Ben Bernanke said Friday that bank would act as needed to strengthen the economic recovery. In the U.K., concerns over the economic outlook were underlined after data showing that the construction sector contracted in August, as new orders fell at the sharpest rate since April 2009. Markit said the U.K. construction purchasing managers' index fell to 49.0 in August from 50.9 in July, compared to expectations for a reading of 50.0. The data came one day after a report showing that the rate of contraction in the U.K. manufacturing sector eased significantly in August. Sterling was little changed against the U.S. dollar, with GBP/USD inching up 0.02% to 1.5888. Later Tuesday, the Institute for Supply Management was to release a closely watched report on U.S. manufacturing growth.

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