EUR/GBP drops swiftly as BoE to tighten policy further despite recession fears


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  • EUR/GBP resumes its downside journey as BoE prepares for 14th consecutive interest-rate hike.
  • UK retail orders and factory activities are facing wrath due to higher cost pressures and an uncertain demand outlook.
  • The ECB raised interest rates by 25 bps to 4.25% and will remain data-dependent for the September policy.

The EUR/GBP pair falls back sharply after facing stiff barricades around 0.8590 in the European session. The asset faces significant offers as the Bank of England (BoE) is expected to continue its rate-hiking spell despite elongated fears of a recession in the United Kingdom.

UK’s authority shows concerns about deepening recession fears due to aggressive interest-rate hikes by the BoE. UK Treasury Advisers to Finance Minister Jeremy Hunt suggest slowing down the pace of hiking interest rates so that the economy could be defended from entering into a recession.

Investors should note that the BoE has already raised its interest rates to 5.0% and is preparing to raise straight for the 14th time. It is expected that the BoE will announce a 25 basis point (bp) interest rate hike on August 03 and will push interest rates to 5.25%.

The UK economy is under severe pressure as the housing sector has started faltering due to higher borrowing costs. Also, retail orders and factory activities are facing wrath due to higher cost pressures and an uncertain demand outlook.

Meanwhile, the Euro fails to outperform despite the European Central Bank (ECB) raising interest rates by 25 basis points (bps) to 4.25% on Thursday. ECB President Christine Lagarde was expected to deliver a hawkish stance as the job market has remained exceptionally strong in Eurozone.

The ECB is expected to remain data-dependent for its September policy, as commented by ECB Lagarde. On the economic data front, the German economy remained stagnant in the second quarter while investors were anticipating a nominal growth of 0.1% against a contraction of 0.3%, being recorded in the January-March quarter.

EUR/GBP

Overview
Today last price 0.8557
Today Daily Change -0.0022
Today Daily Change % -0.26
Today daily open 0.8579
 
Trends
Daily SMA20 0.8582
Daily SMA50 0.8598
Daily SMA100 0.869
Daily SMA200 0.8727
 
Levels
Previous Daily High 0.86
Previous Daily Low 0.8544
Previous Weekly High 0.8701
Previous Weekly Low 0.857
Previous Monthly High 0.8658
Previous Monthly Low 0.8518
Daily Fibonacci 38.2% 0.8578
Daily Fibonacci 61.8% 0.8565
Daily Pivot Point S1 0.8549
Daily Pivot Point S2 0.8519
Daily Pivot Point S3 0.8494
Daily Pivot Point R1 0.8604
Daily Pivot Point R2 0.863
Daily Pivot Point R3 0.866

 

 

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