Ella 
EUR/GBP halted two days of losses and was trading around 0.8420 during the Asian session on Tuesday. The euro strengthened ahead of Tuesday’s release of second-quarter gross domestic product (GDP) data from the euro zone and Germany. Germany is also due to release its consumer price index (CPI) for July.
Germany’s consumer price index (CPI) is expected to increase by 0.2% monthly in July, compared with the previous value of 0.1%. The euro zone’s annual GDP growth in the second quarter is expected to rise from 0.4% to 0.6%, but the quarter-on-quarter growth in the second quarter is expected to fall to 0.2% from the previous value of 0.3%. In addition, the German consumer price index (CPI) is expected to increase by 0.2% month-on-month in July, compared with the previous value of 0.1%.
Chancellor Rachel Reeves made her first statement in parliament on Monday, laying out a raft of spending cuts and project delays following an audit of public finances. According to the British Broadcasting Corporation (BBC), Reeves also announced that the budget will be submitted on October 30, involving “tough decisions” on taxation, spending and benefits.
The Confederation of British Industry (CBI) reported that the monthly retail sales balance fell to -43 in July from -24 in June, well below expectations of -20. This marked the second consecutive month of decline in annual sales. The reduced likelihood of a rate cut by the Bank of England (BOE) in August is likely to continue to support the pound (GBP) and limit the upside for EUR/GBP.
