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Euro holds steady versus pound as traders await UK GDP

EUR/GBP is flat near 0.8540 after the UK logged sticky July inflation, and Thursday’s preliminary UK GDP is seen as the main catalyst for the cross.

Reported · Written up by our desk · Major Pairs

The euro is steady versus the pound on Wednesday, with EUR/GBP trading flat near the 0.8540 area after two straight declines, according to FXStreet.

Sterling briefly touched a two-week high earlier in the day before giving it back after the release of Germany’s consumer price index showed inflation remained sticky in July, leaving traders bracing for the next UK data point.

FXStreet noted that the pair’s tone remains influenced by expectations ahead of Thursday’s preliminary UK GDP, where economists forecast 0.4% quarter-on-quarter growth in the three months to June, down from 0.6% in the prior quarter, and an annual rate of 1.1% versus 0.9% previously.

In the UK policy backdrop, the Bank of England left its key rate unchanged at 3.75% at its early-July meeting, with three of nine monetary policy committee members voting for a 25 basis-point hike, citing upside inflation risks tied to higher energy prices linked to the Middle East.

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