Euro edges up against British Pound but remains within recent ranges

EUR/GBP remains stalled near 0.8550 after bouncing up from lows near 0.8530.
The Pound keeps struggling, weighed by Thursday's weak Industrial Production report.
Rabobank analysts see BoE monetary policy and fiscal concerns weighing on the Pound in the mid-term.

Guillermo Alcala FXStreet

The Euro (EUR) is trading practically flat against the British Pound (GBP) on Friday, holding moderate gains after bouncing from three-week lows on Thursday. The EUR/GBP pair, however, is struggling to find significant acceptance above 0.8550, and remains on track for a 0.2% weekly loss.

Eurozone data released on Friday revealed that German wholesale prices bounced 0.2% in July, following a 0.7 contraction in June, below the 0.4% increase forecasted by market analysts. The Year-on-year rate has accelerated to 5.3% from 4.9% in June. The impact on the Euro, however, has been negligible.

The Sterling retreated against its main peers on Thursday, as data released by the UK National Statistics Office revealed that the Gross Domestic Product (GDP) growth slowed in Q2, in line with market forecasts, and Industrial Production contracted unexpectedly in June amid a sharp drop in manufacturing output.

Looking ahead, Strategists at Rabobank see the Bank of England's (BoE) monetary policy as a hurdle for GBP rallies: “It is RaboResearch’s view that the BoE will likely keep interest rates on hold through to the end of the year.” Rabobank experts observe that “this could weigh on the Pound,” particularly as investors turn their attention to fiscal developments, as "headed into the October 28 UK budget, GBP could find itself on the back foot on fiscal concerns.”

Economic Indicator

Wholesale Price Index (MoM)

The wholesale price Index released by the Statistisches Bundesamt Deutschland shows value of sales made by wholesalers in Germany. A growing number in wholesales indicates increases in retail trade and consumption, that is seen as positive or bullish for the EUR, while a declining number indicates the weakened retail sectors, consumption, and the economy in Germany, that is seen as negative or bearish for the currency.

Economic Indicator

Wholesale Price Index (YoY)

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