Ella 
EUR/GBP continues to fall and is now trading near monthly lows of 0.8540 during the Asian session on Thursday. Better-than-expected inflation data from the UK on Wednesday pushed EUR/GBP further down.
Economic indicators in the UK are likely to fuel concerns about the likelihood of a rate hike from the Bank of England (BOE) at its September meeting. Nonetheless, UK July Consumer Price Index (CPI) came in at -0.4%, slightly better than expectations of -0.5% and below the previous reading of 0.1%. On an annualized basis, the CPI came in at 6.8%, in line with expectations, slightly down from the previous reading of 7.9%. Elsewhere, the core consumer price index, which strips out volatile items, was steady at 6.9%, largely in line with expectations for a 6.8%.
On the other hand, key data from the euro zone on Wednesday showed a dovish reading. Seasonally adjusted gross domestic product (GDP) was in line with expectations, with reports showing the data was unchanged. GDP (qoq) and (yoy) were steady at 0.3% and 0.6%, respectively. Also, Europe’s “Employment Change” is forecast at 0.2% in the second quarter, compared to 0.6% in the previous quarter. The data did not stop EUR/GBP from weakening.
Market participants will be closely watching data on the euro zone’s trade balance due later in the day, as well as the Harmonized Index of Consumer Prices (HICP) due on Friday. Friday also has a scheduled speech by European Central Bank (ECB) Chief Economist Philip Richard Lane and UK retail sales data. These releases are expected to provide valuable insights into the economic outlook of both countries and may influence trading decisions on the EUR/GBP currency pair.
Market participants will be keeping a close eye on upcoming data, starting with the euro zone trade balance due later in the day, followed by the Harmonized Index of Consumer Prices (HICP) due on Friday. Also on Friday’s agenda is a speech by European Central Bank (ECB) Chief Economist Philip Richard Lane and UK retail sales data. These events are expected to provide valuable insight into the economic trajectories of both countries. As such, they can have a significant impact on trading decisions for the EUR/GBP currency pair.
