EURGBP has economic data ahead on Thursday with the release of German inflation and UK GDP growth figures.
EURGBP – Daily Chart
The EURGBP foreign exchange rate is still in an uptrend, but the price action has been consolidating in a range since late September. EURGBP is currently priced at 0.8812 and has resistance ahead of 0.90.
EUR/GBP spiked higher in September as markets panicked about the safety of UK bonds with a failed monetary plan from the previous government.
The price has increased since the European Central Bank started its interest rate hikes. The British pound has been supported by stubborn inflation, which is still near the 10% level.
Thursday’s inflation rate from the German economy is a final reading, and the number is expected to be 7.4%, down from 8.7%. Preliminary data was higher than the market expectations of 6.7%. The German government’s economic advisers projected inflation to average 6.1% this year, three times higher than the European Central Bank’s price stability target, before falling to 3.4 percent in 2023.
A European Commission indicator released at the end of March warned about oncoming inflation. The survey said selling-price expectations for the next quarter were unprecedented across all sectors.
EURGBP Forecast
The UK growth figures for the three months to February will be the most critical and are expected to come in flat on the quarterly level, with a 0.3% annual growth. The British pound can increase the trend if the economy shows additional strength.
The country’s 0.3% quarterly growth would be the worst of any G7 economy, in contrast to emerging markets, which the IMF says are “already powering ahead in many cases, with growth rates jumping from 2.8 percent in 2022 to 4.5 percent this year”.
Traders can look to play the range in the EURGBP between the 0.86 and 0.90 levels.
