Home›Forex›Major Pairs›Euro slips against pound as UK and euro zone data fail…

Euro slips against pound as UK and euro zone data fail to sustain gains

EUR/GBP drifts toward 0.8550, and the next catalyst is Wednesday’s UK CPI forecast to rise to 2.9% year over year from 2.6% previously.

Reported · Written up by our desk · Major Pairs

EUR/GBP edged lower toward 0.8550 on Tuesday, with the euro unable to hold earlier gains versus the pound sterling despite a mixed macro backdrop. FXStreet said the move came even after a soft UK labor report and a stronger German sentiment reading that would normally support the single currency.

On the data side, Germany’s ZEW Economic Sentiment rose to 34.2 in August, beating the 30.0 forecast and improving from July’s 26.3. The Eurozone sentiment gauge also improved more than expected, but the release had little impact on broader EUR/USD and did not keep EUR/GBP bid.

Sterling, meanwhile, faced pressure after UK labor figures for the three months to June showed the ILO Unemployment Rate at 4.9%, above the 4.8% forecast, with employment growth slowing. Analysts at ING characterized the data as not “earth-shattering,” but supportive of a cooling jobs market with minimal wage pressure, implying “little impetus” for the Bank of England to raise rates this year.

Attention now turns to Wednesday’s UK CPI for July, where consensus expects inflation of 2.9% year over year, up from 2.6% previously. FXStreet added that a hotter print could revive BoE hike expectations and weigh on EUR/GBP, while a softer reading may leave the pound vulnerable and allow the euro to recover.

Latest closeEUR/USD 1.157 ▲0.4%

More like this

Sources