EUR/GBP jumps to four-week high as BoE dovish bets offset strong UK data

EUR/GBP trades at 0.8744, up 0.74%, extending rally to a one-month high.
UK Retail Sales beat expectations, rising 1.5% YoY, while core sales are up 2.3%.
Softer inflation earlier in the week keeps BoE rate-cut odds elevated near 65%.

Christian Borjon Valencia FXStreet

EUR/GBP advances during the North American session on Friday, even though Retail Sales in the UK exceeded estimates, but a softer inflation reading increased the odds for further easing by the Bank of England. The cross trades at 0.8744, up 0.74% and hitting a four-week high at the time of writing.

Sterling weakens despite upbeat sales figures; Euro lifted by firmer PMIs across the bloc

Earlier, the Office for National Statistics (ONS) revealed that Retail Sales in September rose 1.5% YoY, exceeding forecasts of 0.6%, boosted by technology and demand for Gold from online retailers. Core sales, which exclude petrol, expanded by 2.3% YoY, above forecasts of 0.7%.

Flash PMIs in the UK showed that business activity is improving, as revealed by S&P Global on Friday.

Meanwhile, the Eurozone HCOB Manufacturing and Services Flash PMI for October improved from 49.8 to 50, and from 51.3 to 52.6, respectively. Both prints exceeded forecasts, an indication that business activity is picking up as demand jumps.

The latest inflation report in the UK increased the markets' bets of a rate cut by the Bank of England towards the end of the year, remaining at 65%, up from two days ago 49% but down from 75% on Thursday.

EUR/GBP Price Forecast: Technical outlook

EUR/GBP shifted neutral to upward biased, but it remains shy of cracking the 2025 high of 0.8757. Although buyers gained momentum, as depicted by the Relative Strength Index (RSI), a breach of the yearly peak could push the cross towards higher prices.

The next key resistance levels seen are 0.88000, followed by the May 3, 2023, daily high at 0.8835.

Euro Price This week

The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.35%	1.01%	1.50%	-0.04%	-0.29%	-0.19%	0.51%
EUR	-0.35%		0.67%	1.23%	-0.38%	-0.54%	-0.60%	0.17%
GBP	-1.01%	-0.67%		0.33%	-1.05%	-1.20%	-1.27%	-0.51%
JPY	-1.50%	-1.23%	-0.33%		-1.57%	-1.80%	-1.74%	-1.08%
CAD	0.04%	0.38%	1.05%	1.57%		-0.21%	-0.22%	0.54%
AUD	0.29%	0.54%	1.20%	1.80%	0.21%		-0.07%	0.70%
NZD	0.19%	0.60%	1.27%	1.74%	0.22%	0.07%		0.77%
CHF	-0.51%	-0.17%	0.51%	1.08%	-0.54%	-0.70%	-0.77%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

AUD/USD reclaims 0.7100 and above

AUD/USD regains the smile, reversing three consecutive daily pullbacks and returning to the area beyond 0.7100 the figure following the Wall St close on Thursday. That said, the softer tone in the US Dollar lends support to the pair’s recovery at the time when market participants continue to digest Wednesday’s hawkish message by the Fed.

USD/JPY looks slightly offered near 156.00 ahead of BoJ

USD/JPY trades with decent losses in the 156.00 region ahead of the opening bell in Asia. Indeed, the pair has faded part of the recent three-day positive streak, faltering just ahead of the 156.50 level. Meanwhile, all the attention is expected to be on the BoJ early on Friday, with investors largely anticipating a 25-bps rate hike.

Gold: Upside appears capped by $4,400

Gold climbs sharply and clinches fresh weekly peaks on Thursday, although the bull run seems to have met some initial hurdle around the $4,400 zone per troy ounce. The yellow metal’s rebound reverses three daily declines in a row and follows the modest retracement in the US Dollar as well as another negative performance of crude oil prices.

Zcash Price Forecast: ZEC eyes $1,500 breakout as retail demand expands

Zcash (ZEC) rises sharply above $1,400 on Thursday as the privacy-focused token defies the broader cryptocurrency market's doldrums this week, driven primarily by macro uncertainty and regulatory headwinds. ZEC’s bullish outlook, though seemingly overextended, remains stable, supported by growing retail demand reflected in the derivatives market.

One hike down, more to come? The Fed’s new rate path says yes

The Federal Reserve (Fed) raised its Fed Fund Target Range (FFTR) range by 25 basis points to 3.75%-4.00% in a unanimous decision, saying the move would support a timelier return to its 2% inflation goal.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.