Ella 
In the Asian market on Wednesday, after falling the day before yesterday, EUR/GBP struggled to maintain its downward trend, trading around 0.8520. The prospect of further rate hikes by the Bank of England (BOE) further fueled EUR/GBP’s downward trajectory.
Market participants will also focus on U.K. economic data, including the flash S&P Global/CIPS composite purchasing managers’ index for August, due on Wednesday. These events are expected to provide valuable signals on the trajectories of both economies, the euro area and the UK. As such, these data could have a significant impact on EUR/GBP trading decisions.
UK wage growth is a supportive factor for the pound, which could cap gains in EUR/GBP. This raised concerns about long-term inflation in the UK, supporting the prospect of a 25 basis point (bps) rate hike at the Bank of England’s September meeting. In addition, strong UK GDP and benign UK inflation also support the prospect of further tightening by the Bank of England.
Euro traders turned cautious ahead of flash HCOB purchasing managers’ indices from the euro zone and Germany due later. However, sustained market optimism and a weaker dollar and lower U.S. Treasury yields supported the euro. China’s economic woes weighed on the euro, but any further signs of fiscal stimulus from China could support the single currency.
