- EUR/GBP regains positive traction and draws support from a combination of factors.
- The mixed UK macro data lifts BoE rate cut bets and undermines the British Pound.
- Higher German core CPI lends some support to the shared currency and spot prices.
The EUR/GBP cross attracts fresh buyers near the 0.8400 mark and stalls the previous day's sharp retracement slide from its highest level since August 23. Spot prices stick to positive bias around the 0.8435-0.8440 region following the release of the UK macro data and the final German Consumer Price Index (CPI) print.
The UK Office for National Statistics (ONS) reported that the economy returned to expansion and grew 0.1% in November after declining 0.1% in the previous month. Other data from the UK showed that monthly Industrial and Manufacturing Production dropped more than expected, by 0.4% and 0.3%, respectively, in November. This comes on top of Wednesday's softer consumer inflation figures from the UK and offers the Bank of England (BoE) an opportunity to cut interest rates in February. Adding to this concerns about the UK’s fiscal situation and the risk of stagflation – a combination of high inflation and weak economic growth – undermine the British Pound (GBP).
The shared currency, on the other hand, draws some support from a rise in German core annual inflation, which crept higher to 3.3% in December from 3.0% in the previous month. This turns out to be another factor that remains supportive of the bid tone surrounding the EUR/GBP cross. The data, however, raises stagflation worries for the Eurozone's largest economy and reaffirms expectations for further interest rate cuts by the European Central Bank (ECB). This might cap gains for the Euro and warrants some caution for bullish traders around the currency pair, making it prudent to wait for acceptance above the very important 200-day SMA before placing fresh bets.
Economic Indicator
Gross Domestic Product (MoM)
The Gross Domestic Product (GDP), released by the Office for National Statistics on a monthly and quarterly basis, is a measure of the total value of all goods and services produced in the UK during a given period. The GDP is considered as the main measure of UK economic activity. The MoM reading compares economic activity in the reference month to the previous month. Generally, a rise in this indicator is bullish for the Pound Sterling (GBP), while a low reading is seen as bearish.
Read more.Last release: Thu Jan 16, 2025 07:00
Frequency: Monthly
Actual: 0.1%
Consensus: 0.2%
Previous: -0.1%
Source: Office for National Statistics
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.
Recommended content
Editors’ Picks
EUR/USD rose to fresh highs around 1.1240
EUR/USD maintained its bullish momentum on Thursday, climbing to the 1.1240 region as the US Dollar accelerated its decline amid growing concerns about the economic fallout from Trump's tariffs.
GBP/USD picks up pace, challenges 1.3000
GBP/USD made significant gains, edging just pips shy of the psychological 1.3000 barrier. The advance came amid trade war jitters and a sharp sell-off in the Greenback following the announcement of 145% US tariffs on China.
Gold flirts with record peaks near $3,175, Dollar tumbles
Gold continued its record-setting rally on fresh tariff-related headlines, surging past the $3,170 mark per troy ounce after the White House confirmed new tariffs, sparking another round of US Dollar selling.
Cardano stabilizes near $0.62 after Trump’s 90-day tariff pause-led surge
Cardano stabilizes around $0.62 on Thursday after a sharp recovery the previous day, triggered by US Donald Trump’s decision to pause tariffs for 90 days except for China and other countries that had retaliated against the reciprocal tariffs announced on April 2.
Trump’s tariff pause sparks rally – What comes next?
Markets staged a dramatic reversal Wednesday, led by a 12% surge in the Nasdaq and strong gains across major indices, following President Trump’s unexpected decision to pause tariff escalation for non-retaliating trade partners.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.