EUR/GBP keeps the red above mid-0.8500s after Eurozone inflation data, ahead of BoE’s Bailey
|- EUR/GBP snaps a two-day winning streak, though it lacks follow-through selling.
- The Eurozone consumer inflation meets expectations and fails to influence the cross.
- Traders now look to BoE Governor Bailey’s speech for some meaningful impetus.
The EUR/GBP cross retreats from the vicinity of the 0.8600 mark, or its highest level since April 23 touched earlier this Tuesday and sticks to modest intraday gains through the first half of the European session. Spot prices, however, manage to hold above mid-0.8500s and move little following the release of the latest consumer inflation figures from the Eurozone.
The official data released by Eurostat showed the Eurozone Harmonized Index of Consumer Prices (HICP) increased at an annual pace of 2% in June, in line with the market expectations following a 1.9% growth reported in May. Moreover, the core HICP rose 2.3% YoY during the reported month, at the same pace as seen in May, meeting the 2.3% estimate.
The market reaction, however, turns out to be muted as the data fails to influence market expectations about more interest rate cuts by the European Central Bank (ECB) in H2 2025. This, in turn, is seen as a key factor behind the shared currency's relative underperformance against its British counterpart and exerting some downward pressure on the EUR/GBP cross.
However, hopes that the European Union (EU) will strike a trade deal with the US ahead of US President Donald Trump's July 9 deadline help limit losses for the EUR. Traders also seem reluctant to place directional bets around the EUR/GBP cross and opt to wait for Bank of England (BoE) Governor Andrew Bailey's comments at the ECB Forum on Central Banking, in Sintra.
Even from a technical perspective, the lack of follow-through selling below mid-0.8500s warrants caution for aggressive bearish traders. Hence, it will be prudent to wait for strong follow-through selling before positioning for any further depreciating move for the EUR/GBP cross.
Economic Indicator
Core Harmonized Index of Consumer Prices (YoY)
The Core Harmonized Index of Consumer Prices (HICP) measures changes in the prices of a representative basket of goods and services in the European Monetary Union. The HICP, – released by Eurostat on a monthly basis, is harmonized because the same methodology is used across all member states and their contribution is weighted. The YoY reading compares prices in the reference month to a year earlier. Core HICP excludes volatile components like food, energy, alcohol, and tobacco. The Core HICP is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.
Read more.Last release: Tue Jul 01, 2025 09:00 (Prel)
Frequency: Monthly
Actual: 2.3%
Consensus: 2.3%
Previous: 2.3%
Source: Eurostat
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.