Economy Forex News

EUR / GBP hovers over daily lows around 0.8425

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  • EUR/GBP witnesses some selling on Thursday and extends the previous day’s pullback decline.
  • Sterling’s relative outperformance linked to the BoE’s optimistic expectations.
  • The downside appears limited as the focus remains on the ECB monetary policy meeting.

The EUR/GBP pair has moved lower during the first half of the European session on jeuves and has fallen to new daily lows around the 0.8425 region in the last hour.

EUR/GBP

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The pair has struggled to capitalize on its initial rally to 0.8450

The cross has struggled to capitalize on its initial rally to 0.8450. It met with some fresh selling on Thursday, extending the previous day’s pullback from the 0.8465-70 resistance zone. Sterling’s relative outperformance follows the upbeat economic forecast from UK Finance Minister Rishi Sunak during Wednesday’s annual budget presentation.

In its latest forecasts, the Office for Budget Responsibility (OBR) predicts growth of 6.5% this year and 6% in 2022. The OBR sees inflation averaging 4% next year, well above the Bank of England’s 2% target. Expectations that the BoE will raise interest rates at its next policy meeting were reinforced. Which acted as a tailwind for sterling and weighed on the EUR/GBP cross.

However, the emergence of fresh buying around the US dollar has weighed on the common currency as well as contributed to the EUR/GBP cross’s selling tone. The fall, however, seems to be supported amid renewed nervousness over Brexit. Also, investors may refrain from opening aggressive positions ahead of the European Central Bank’s (ECB) anticipated monetary policy meeting on Thursday.

According to the latest Brexit developments, France will tighten controls on UK ships. Additionally trucks as well, as restrict energy supplies to the Channel Islands if there is no fishing rights agreement reached by November 2. Meanwhile, UK Prime Minister Boris Johnson said that unless rapid progress on the Northern Ireland protocol is made, the conditions for invoking Article 16 had been met.

EUR/GBP has been oscillating in a wider trading range over the past two weeks

Over the past two weeks, the EUR/GBP cross has fluctuated in a wider range, even from a technical perspective. This constitutes the formation of a rectangle on short-term charts and points to indecision among investors. Further caution is warranted before committing to a short-term strategy.

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Michelle D. Madsen

Michelle D. Madsen graduated from the University of Westminster and has been deeply involved in the world of finance ever since. She has worked as a Broadcast Journalist hosting various news shows and informative webcasts about the financial markets. Since 2004 she has also been writing for Metanews daily, her attention to detail, and her in-depth knowledge of the financial markets have led her to cover Foreign Exchange and commodities. The world of finance has changed in the last few years with the introduction and rising popularity of cryptocurrencies. She has in no means been left behind, adding this to her bank of intellect and is now also an expert in cryptocurrencies. For the last ten years, Ms. Madsen has been engaged in the financial market. She has notedly written a great number of incredibly informative reviews for the crypto exchange and forex brokers. Her wealth of knowledge has enabled her to become a leading expert in the field. She continues to inform the public writing up-to-date, thorough reviews for the readers of Metanews as she has for the last decade.
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