EUR/GBP edges up above 0.8700 on shaky markets

The Euro stands above 0.8700 against the Pound but is on track for a moderate weekly decline.
The pair trades in range amid a frail market sentiment as Iran's ceasefire staggers.
German inflation data endorses the view of an upcoming ECB rate hike.

Guillermo Alcala FXStreet

The Euro (EUR) holds moderate gains against the British Pound (GBP) on Friday. The pair edges up above 0.8700 at the European session’s opening times, yet on track to a minor weekly decline, with both currencies trimming gains against the safe-haven US Dollar (USD) as Iran’s ceasefire staggers.

Tehran has threatened to pull out of the peace process after massive attacks from Israel killed more than 300 people in Lebanon. US President Donald Trump, on the other hand, has complained about Iran’s poor handling of the traffic in the Strait of Hormuz, warning on Truth Social that "That is not the agreement we have".

Data released by the Hormuz Trail Monitor shows that only seven vessels have crossed the critical waterway in the last 24 hours. This is about a 5% of the 140 ships that would sail through the strait in an average day before the war, while Iranian authorities are reportedly charging fees for Oil tankers.

German Inflationary pressures soar in March

In the economic docket, the German Harmonized Index of Consumer Prices (HICP) confirmed preliminary figures showing that inflation accelerated 1.2% in March and 2.8% year on year, from 0.4% and 2.0% respectively, boosted by higher energy prices amid the war in the Middle East.

These figures fuel market expectations that the European Central Bank (ECB) will be forced to hike rates in the coming months, and maybe as soon as in April. The Bank of England (BoE), on the contrary, is taking a “wait and see " stance and is not expected to tighten its monetary policy anytime soon. This is providing some competitive advantage to the Euro.

(This story was corrected on April 10 at 07;50 GMT to say that the German year-on-year HICP accelerated to 2.8% in March from 2.0% in February, instead of the 2.7% and 1.9% respective figures previously reported.)

Economic Indicator

Harmonized Index of Consumer Prices (MoM)

The Harmonized Index of Consumer Prices (HICP), released by the German statistics office Destatis on a monthly basis, is an index of inflation based on a statistical methodology that has been harmonized across all European Union (EU) member states to facilitate comparisons. The MoM figure compares the prices of goods in the reference month to the previous month. Generally, a high reading is bullish for the Euro (EUR), while a low reading is bearish.

Economic Indicator

Harmonized Index of Consumer Prices (YoY)

The Harmonized Index of Consumer Prices (HICP), released by the German statistics office Destatis on a monthly basis, is an index of inflation based on a statistical methodology that has been harmonized across all European Union (EU) member states to facilitate comparisons. The YoY reading compares prices in the reference month to a year earlier. Generally, a high reading is bullish for the Euro (EUR), while a low reading is bearish.

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