- EUR/GBP is facing weak barricades around 0.8660, a break above the same looks likely.
- The ECB is set to hike its interest rates next week as the HICP has crossed 9%.
- An extension in the energy supplies cut period to Germany may strengthen energy crisis fears.
The EUR/GBP pair has refreshed its two-month high at 0.8661 and is now struggling at elevated levels. The asset continued its four-day winning streak on Thursday after overstepping Wednesday’s high at 0.8653. The cross has displayed a sheer upside move after the inflation rate in the Eurozone crossed 9% comfortably.
On Wednesday, European Central Bank (ECB)’s preferred inflation indicator Eurozone Harmonized Index of Consumer Prices (HICP) landed at 9.1%, higher than the expectations of 9% and the prior release of 8.9%. As price pressures are soaring in the shared currency region amid accelerating energy bills after energy supply cuts by Russia, the inflation rate is skyrocketing.
This has strengthened the odds of a bumper rate hike announcement by the ECB next week. ECB’s Governing Council member and German central bank head Joachim Nagel on Wednesday cited that the ECB “urgently needs to act decisively next week,” He further added that “We need a strong rate hike in September,”
Apart from that, investors are also worried over an extension of unscheduled maintenance of the Nord Stream 1 pipeline under the Baltic Sea from Russia. The ongoing tensions between eurozone and Russia after the former boycotted oil and energy imports from the latter may result in an extension of the maintenance period as Russia eyes revenge. An occurrence of the same will accelerate fears of an energy crisis in Germany. As Germany is a core member of the European Union (EU), an occurrence of a German energy crisis could impact shared currency dramatically.
On the pound front, a light economic calendar holds shared currency responsible for movement in the cross ahead. On a broader note, political instability in the UK zone is weakening the sterling bulls. This month, elections for UK Prime Minister will be the key event to watch.
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 trades with negative bias, holds above 1.0700 as traders await US PCE Price Index
EUR/USD edges lower during the Asian session on Friday and moves away from a two-week high, around the 1.0740 area touched the previous day. Spot prices trade around the 1.0725-1.0720 region and remain at the mercy of the US Dollar price dynamics ahead of the crucial US data.
USD/JPY jumps above 156.00 on BoJ's steady policy
USD/JPY has come under intense buying pressure, surging past 156.00 after the Bank of Japan kept the key rate unchanged but tweaked its policy statement. The BoJ maintained its fiscal year 2024 and 2025 core inflation forecasts, disappointing the Japanese Yen buyers.
Gold price flatlines as traders look to US PCE Price Index for some meaningful impetus
Gold price lacks any firm intraday direction and is influenced by a combination of diverging forces. The weaker US GDP print and a rise in US inflation benefit the metal amid subdued USD demand. Hawkish Fed expectations cap the upside as traders await the release of the US PCE Price Index.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.