- EUR/GBP is advancing towards 0.8450 swiftly as a consensus for UK inflation has spurted to 13%.
- Lower earnings and now higher inflation expectations will create more troubles for the BOE.
- The German Factory Orders have squeezed by 0.4% vs. 0.2% recorded earlier.
The EUR/GBP pair has turned sideways around 0.8430 in the Tokyo session after a juggernaut upside move from 0.8360 on Thursday. The cross displayed a sheer upside after the Bank of England (BOE) raised its interest rates by 50 basis points (bps). It was a consecutive 50 bps rate hike by the BOE, which pushed the interest rates to 1.75%.
The investing community is aware of the fact that earnings by UK households have remained vulnerable in the past few months. Apart from that, the inflation rate is sky-rocketing in the economy. Earlier, the inflation rate landed at 9.4%. Now, the statement from BOE Governor Andrew Bailey that the price pressures could reach 13% has created havoc in the sentiment of the market participants.
The runaway inflation is now turning into a galloping one and the BOE has very less room for tightening its policy. Thanks to the subdued economic data and the ongoing political instability after the resignation of UK PM Boris Johnson, which have created a bummer situation for the BOE. In case of the occurrence of an inflation rate near 13%, a situation of recession in the UK economy is highly likely.
On the Eurozone front, German Factory Order data have squeezed by 0.4% vs. the expectation of a squeeze by 0.8% and the prior squeeze of 0.2% on a monthly basis. A lower Factory Orders figures are indicating dismal overall demand in Germany. It is worth noting that Germany is a core member of The European Union (EU) and German economic data carries a significant impact on the shared currency bulls.
|Today last price||0.8429|
|Today Daily Change||0.0005|
|Today Daily Change %||0.06|
|Today daily open||0.8424|
|Previous Daily High||0.8437|
|Previous Daily Low||0.8344|
|Previous Weekly High||0.8525|
|Previous Weekly Low||0.8346|
|Previous Monthly High||0.8679|
|Previous Monthly Low||0.8346|
|Daily Fibonacci 38.2%||0.8402|
|Daily Fibonacci 61.8%||0.838|
|Daily Pivot Point S1||0.8366|
|Daily Pivot Point S2||0.8309|
|Daily Pivot Point S3||0.8274|
|Daily Pivot Point R1||0.8459|
|Daily Pivot Point R2||0.8494|
|Daily Pivot Point R3||0.8552|
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.