EUR/GBP rises above 0.8350 ahead of Eurozone GDP, UK Autumn Forecast Statement
- EUR/GBP appreciates as the British Pound faces challenges ahead of the UK’s Autumn Forecast Statement.
- UK Chancellor of the Exchequer, Rachel Reeves, plans to implement approximately £40 billion in fiscal measures, primarily through tax increases.
- Traders await the release of preliminary Gross Domestic Product (GDP) data from Germany and the Eurozone on Wednesday.
EUR/GBP recovers its recent losses from the previous session, trading near 0.8320 in the European session on Wednesday. This downward trend in the EUR/GBP cross could be attributed to a weaker Pound Sterling (GBP) ahead of the UK’s upcoming Autumn Forecast Statement. This will mark the first budget announcement by a Labor government in over 15 years.
Reuters cited government sources, UK Chancellor of the Exchequer, Rachel Reeves plans to implement approximately £40 billion ($52 billion) in fiscal measures, primarily through tax increases, to fulfill her commitment to fund day-to-day government expenses.
The Euro may face headwinds as the European Central Bank (ECB) is widely expected to lower its Deposit Facility Rate again. Current money market data suggests nearly a 50% probability of a 50 basis point rate cut in the December meeting.
Investors will pay close attention to preliminary Gross Domestic Product (GDP) data from Germany and the Eurozone, as well as Germany’s preliminary Harmonized Index of Consumer Prices (HICP) figures, all set for release on Wednesday.
In recent days, ECB policymakers have expressed mixed views on monetary policy. Pierre Wunsch, Governor of the National Bank of Belgium, indicated that there is no urgency to accelerate rate cuts and even suggested that a modest rate could be sustained. In contrast, Mario Centeno, Governor of the Bank of Portugal, supported the idea of a potential 50 basis point rate cut in December.
Economic Indicator
Gross Domestic Product s.a. (YoY)
The Gross Domestic Product (GDP), released by the Eurostat on a quarterly basis, is a measure of the total value of all goods and services produced in the Eurozone during a certain period of time. The GDP and its main aggregates are among the most significant indicators of the state of any economy. The YoY reading compares economic activity in the reference quarter compared with the same quarter a year earlier. Generally speaking, a rise in this indicator is bullish for the Euro (EUR), while a low reading is seen as bearish.
Read more.Next release: Wed Oct 30, 2024 10:00 (Prel)
Frequency: Quarterly
Consensus: 0.8%
Previous: 0.6%
Source: Eurostat
Author
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
