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Euro falls to fresh two-month lows versus British pound after hot inflation

Eurozone HICP rose to 3.8% year-on-year in September, while the German-French bond yield gap widened beyond 140 basis points.

Reported · Written up by our desk · Major Pairs

The euro reversed earlier gains against the British pound and slid to fresh two-and-a-half-month lows just above 0.8500 on Friday, putting the currency on track for a weekly decline of more than 1%, according to FXStreet.

FXStreet also pointed to new inflation data, saying Eurostat reported Eurozone preliminary HICP accelerated in September to a three-year high, with headline inflation rising to 3.8% year-on-year from 3.2% in August, while core HICP climbed to 2.5% from 2.4%.

The outlet cited a mix of factors weighing on the euro, including surging Eurozone inflation, high oil prices, and escalating borrowing costs in France.

FXStreet added that concern over France’s borrowing costs intensified as the gap between German and French government bond yields surged beyond 140 basis points on Friday, the largest differential since 2012.

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