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EUR/GBP drifts sideways as traders weigh ECB and BoE outlooks
The eurozone economy expanded 0.4% in Q2 and UK growth also rose 0.4%, leaving EUR/GBP near 0.8543 as markets look to next week’s UK CPI for fresh inflation signals.
EUR/GBP was little changed on Friday, extending a sideways pattern from earlier in the week, with the pair trading around 0.8543 as investors reacted only mildly to second-quarter GDP data from both the eurozone and the UK, according to FXStreet.
Eurostat’s second estimate showed the eurozone economy grew 0.4% in Q2, matching the flash reading and improving from zero growth in the prior quarter. On an annual basis, growth accelerated to 1.0% from a previously reported 0.5%.
UK data also pointed to 0.4% growth in Q2, matching forecasts but easing from 0.6% in Q1, while annual growth improved to 1.2% from 0.9%, beating the 1.1% estimate.
FXStreet said traders remain focused on elevated oil prices and what they could mean for inflation and central bank policy expectations. Markets are pricing a September ECB rate hike, and the report highlighted Nordea’s view of additional 25 basis point increases, alongside an expectation that the BoE will likely hold rates steady ahead of next week’s UK CPI release.