- EUR / GBP remains practically unchanged on Wednesday in the European session.
- Euro gains are constrained by lousy eurozone data and the pessimistic ECB.
- UK CPI data does not trigger significant action for EUR / GBP, focus on EU CPI.
The crossing EUR/GBP consolidates into a narrow range during Wednesday’s European session. At the time of writing, the pair remains around 0.7435, unchanged on the day.
The common currency managed to gain a bit of traction against the British pound after the UK inflation data was released, although the EUR / GBP cross then fell back again. The consumer price index UK CPI stood at 3.1% in September, versus market expectations of 3.2%. The producer price index PPI stood at 5.9% in September, slightly above the market forecast of 5.8%. EUR / GBP is largely unchanged after mixed inflation data.
Investors have increased their expectations about the Bank of England (BoE) rate hikes in November and December, respectively. The BoE has predicted that Britain’s inflation rate will exceed 4%, more than double its target.
On the other hand, the members of the European Central Bank (ECB) maintain their pessimistic stance on inflation and interest rate hikes. Olli Rehn, a member of the ECB’s Governing Council, said that current inflation is being transitory, and that there was sufficient evidence to support his comments. Core inflation remained subdued.
For now, investors are awaiting speeches by ECB members and the release of the eurozone CPI consumer price index to gauge market sentiment data.
EUR / GBP technical levels
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