EUR/GBP extends recovery after a rebound from 0.8600 ahead of ECB Lagarde’s speech


  • EUR/GBP has extended its recovery to near 0.8615 ahead of ECB Lagarde's speech.
  • Eurozone 12-month inflation expectations have climbed to 5.4% vs. the former release of 5.1%.
  • The rising food supply crisis is fueling already strengthened food inflation in the UK economy.

The EUR/GBP pair has stretched its recovery to near 0.8615 in the Asian session. The cross rebounded firmly after testing Wednesday’s low around 0.8600 as investors are shifting their focus towards the speech from European Central Bank (ECB) President Christine Lagarde.

The speech from ECB President will provide fresh impetus about the likely monetary policy actions in December monetary policy meeting. Although ECB policymakers believe that the central bank has done a lot in pushing interest rates and a neutral rate is not so far now but a rate hike in December is higher expected as inflationary pressures are still solid in Eurozone.

A survey from the ECB on consumer inflation expectations for the next 12 months conducted revealed that median expectations for inflation have increased to 5.4% from former projections of 5.1%. While three-year inflation expectations are unchanged at 3.0%. Therefore, investors should brace for a hawkish commentary on interest rate guidance by ECB President.

This week, monthly Retail Sales data contracted by 1.8% while expectations were aiming for a 1.7% contraction this week. And, annual Retail Sales contracted by 2.7% against the consensus of a 2.6% contraction. Ceteris Paribus, a decline in consumer spending is hinting that inflation may display a slowdown ahead.

On the United Kingdom front, inflation expectations have soared as escalating food supply crisis is fueling already firm food inflation. Rising input costs and shortage of labor are resulting in a shortage of food supply, which is expected to paddle up food inflation from the current pace of 12.4%. This could extend the extent of recession in the UK economy and could impact Pound Sterling.

EUR/GBP

Overview
Today last price 0.8616
Today Daily Change 0.0010
Today Daily Change % 0.12
Today daily open 0.8606
 
Trends
Daily SMA20 0.866
Daily SMA50 0.8692
Daily SMA100 0.8629
Daily SMA200 0.8544
 
Levels
Previous Daily High 0.8643
Previous Daily Low 0.8598
Previous Weekly High 0.8676
Previous Weekly Low 0.8547
Previous Monthly High 0.8828
Previous Monthly Low 0.8572
Daily Fibonacci 38.2% 0.8615
Daily Fibonacci 61.8% 0.8626
Daily Pivot Point S1 0.8588
Daily Pivot Point S2 0.8571
Daily Pivot Point S3 0.8543
Daily Pivot Point R1 0.8633
Daily Pivot Point R2 0.8661
Daily Pivot Point R3 0.8678

 

 

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