- EUR/GBP moves higher to 2-day highs near 0.9040 on Tuesday.
- The sterling loses ground on the back of further USD-buying.
- UK’s Services PMI, BoE meeting next of relevance in the docket.
The now better tone around the greenback is forcing both the sterling and the European currency to give away initial gains, prompting EUR/GBP to climb to fresh weekly peaks in the 0.9040 region.
EUR/GBP looks to data, BoE
EUR/GBP has managed to regain composure around recent lows in the 0.8980 region, retaking the key 0.90 barrier and beyond in a context of the continuation of the dollar’s recovery following July’s steep sell-off.
In fact, the quid is so far suffering the brunt of the dollar’s rebound, therefore underpinning the upside momentum in the cross. Other than that, market participants keep monitoring the progress of the economic re-opening on both sides of the Channel, while EU-UK trade effervescence remains absent (postponed?).
Earlier in the session EMU’s Producer Prices rose 0.7% from a month earlier in June and contracted 3.7% over the last twelve months. In the UK, the always-relevant Services PMI is due on Wednesday ahead of the BoE event on Thursday followed by Governor A.Bailey’s press conference.
EUR/GBP key levels
The cross is gaining 0.38% at 0.9029 and faces the next hurdle at 0.9148 (monthly high Jul.27) followed by 0.9175 (monthly high Jun.21) and finally 0.9324 (2019 high Aug.12). On the downside, a breach of 0.8980 (weekly low Jul.31) would expose 0.8937 (monthly low Jul.10) and then 0.8864 (monthly low Jun.9).
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds hot Australian CPI-led gains above 0.6500
AUD/USD consolidates hot Australian CPI data-led strong gains above 0.6500 in early Europe on Wednesday. The Australian CPI rose 1% in QoQ in Q1 against the 0.8% forecast, providing extra legs to the Australian Dollar upside.
USD/JPY sticks to 34-year high near 154.90 as intervention risks loom
USD/JPY is sitting at a multi-decade high of 154.88 reached on Tuesday. Traders refrain from placing fresh bets on the pair as Japan's FX intervention risks loom. Broad US Dollar weakness also caps the upside in the major. US Durable Goods data are next on tap.
Gold price struggles to lure buyers amid positive risk tone, reduced Fed rate cut bets
Gold price lacks follow-through buying and is influenced by a combination of diverging forces. Easing geopolitical tensions continue to undermine demand for the safe-haven precious metal. Tuesday’s dismal US PMIs weigh on the USD and lend support ahead of the key US macro data.
Crypto community reacts as BRICS considers launching stablecoin for international trade settlement
BRICS is intensifying efforts to reduce its reliance on the US dollar after plans for its stablecoin effort surfaced online on Tuesday. Most people expect the stablecoin to be backed by gold, considering BRICS nations have been accumulating large holdings of the commodity.
US versus the Eurozone: Inflation divergence causes monetary desynchronization
Historically there is a very close correlation between changes in US Treasury yields and German Bund yields. This is relevant at the current juncture, considering that the recent hawkish twist in the tone of the Fed might continue to push US long-term interest rates higher and put upward pressure on bond yields in the Eurozone.