EUR/GBP rises to near 0.8570 after retracing recent losses, awaits PMI from UK, Eurozone


  • EUR/GBP edges higher after BoE’s Dhingra advocated for rate cuts.
  • Euro could experience pressure as a result of market caution stemming from diminishing expectations of reducing borrowing costs globally.
  • Thursday brings PMI data from the United Kingdom and the Eurozone.

EUR/GBP recovers its recent losses on Thursday, trading higher around 0.8570 during the Asian session. On Wednesday, Swati Dhingra, a member of the Bank of England (BoE), suggested that delaying interest rate cuts could lead to increased living costs and potentially result in a harsh economic downturn for the United Kingdom (UK). Dhingra reiterated her argument in favor of implementing rate cuts.

BoE Governor Andrew Bailey addressed the United Kingdom Parliament on Tuesday, noting the rapid decrease in inflation in the UK. He emphasized that the central bank doesn't necessitate a definitive return of inflation to target levels before contemplating interest rate cuts. Additionally, BoE Deputy Governor Ben Broadbent highlighted that wage growth and services inflation both exceed the rate, suggesting alignment with sustainable inflation at 2%.

The Euro faced pressure, likely due to market caution amidst reduced expectations for early interest rate cuts globally. However, China's decision to reduce its five-year Loan Prime Rate (LPR) by 25 basis points (bps) to bolster its economy may offer some support for the Euro, considering the commodities' exports from the Eurozone to China.

Meanwhile, the seasonal and non-seasonal adjusted ECB Current Account improved in December compared to the previous month. Additionally, ECB Negotiated Wage Rates (QoQ) increased in the fourth quarter of 2023. ECB President Christine Lagarde recently emphasized wages as "an increasingly important driver of inflation dynamics in the coming quarters."

Traders are likely preparing for potential volatility surrounding the upcoming release of Purchasing Managers Index (PMI) data from both the Eurozone and the United Kingdom, scheduled for Thursday.

EUR/GBP: additional important levels

Overview
Today last price 0.8568
Today Daily Change 0.0006
Today Daily Change % 0.07
Today daily open 0.8562
 
Trends
Daily SMA20 0.8541
Daily SMA50 0.8589
Daily SMA100 0.863
Daily SMA200 0.8616
 
Levels
Previous Daily High 0.8572
Previous Daily Low 0.8557
Previous Weekly High 0.857
Previous Weekly Low 0.8498
Previous Monthly High 0.8683
Previous Monthly Low 0.8513
Daily Fibonacci 38.2% 0.8563
Daily Fibonacci 61.8% 0.8566
Daily Pivot Point S1 0.8556
Daily Pivot Point S2 0.8549
Daily Pivot Point S3 0.8541
Daily Pivot Point R1 0.857
Daily Pivot Point R2 0.8578
Daily Pivot Point R3 0.8585

 

 

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