EUR/GBP remains poised to gain above 86.10 ahead of EU data
- EUR/GBP consolidates near the higher levels preserving the previous session's upside momentum.
- The Euro remains grounded on upbeat economic data, ECB assures growth with downside risk.
- BOE’s pessimistic view on inflation and interest rates weighs down on the sterling.
EUR/GBP remains muted on Friday in the initial Asian trading hours. The pair refreshed high near 86.20 in the previous day’s session in a 50 pips movement.
At the time of writing, EUR/GBP is trading at 0.8606, up 0.03% for the day.
The single currency gained on the upbeat economic data. The Eurozone Unemployment Rate fell 7.9% in May, marginally below the market estimates of 8.0%. The IHS Markit Eurozone Manufacturing PMI rose to a new record level of 63.4 in June.
The Annual Inflation rate eased to 1.9% in June from a two-and-a-half-year high of 2% in May.
Meanwhile, the European Central Bank (ECB) President Christine Lagarde said that the rapid vaccination program has reduced the probability of severe scenarios and resulted in an improved economic outlook. The view raised the expectations that the central bank might start talking about tapering.
On the other hand, the sterling came under renewed pressure after the Bank of England (BOE) Governor Andrew Bailey said that the central bank will apply its policy tools if inflation is persistent. The dovish stance rejected the higher rates scenario in the near future.
In addition to that, the IHS Markit/CIPS UK Manufacturing PMI came at 63.9 in June, below the market estimates of 64.2.
As for now, traders wait for the Euro Producer Price Index (PPI) data to gain fresh trading impetus.
EUR/GBP additional levels
Author
Rekha Chauhan
Independent Analyst
Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.
