Despite the BoE’s hawkish guidance, EUR/GBP trims losses below the mid-0.8500s, and the upside appears limited.

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In the early European session on Friday, EUR/GBP attracts some buyers near 0.8531.

The Bank of England (BoE) maintained the same interest rates and relaxed its position regarding when rates would be reduced.

From 2.9% in December, annual inflation in the Eurozone decreased to 2.8% YoY in January.

The EUR/GBP cross makes progress beneath the mid-0.8500s during the early European meeting on Friday. However, the cross appears to have few advantages. The Bank of Britain (BoE) held rates consistent at its January meeting on Thursday, and BoE Lead representative Andrew Bailey said more proof of expansion is required prior to bringing down rates. The cross is up 0.03% on the day at the time of writing, trading at 0.8531.

The BoE’s Monetary Policy Committee voted on Thursday to maintain rates at their 15-year high of 5.25 percent. Andrew Bailey, governor of the UK central bank, said in his speech that the Bank of England (BoE) can’t lower interest rates until they see more evidence that inflation is close to the 2% target. In addition, the UK economy’s persistent inflation and wage growth may persuade the BoE to hold rates steady for a longer period of time than the European Central Bank (ECB). This, thusly, could lift the Pound Real (GBP) and go about as a headwind for the EUR/GBP cross.

On the Euro front, the Eurozone Fit Record of Buyer Costs (HICP) facilitated to 2.8% YoY in January from 2.9% in December, in accordance with market assumptions. In the mean time, the Center expansion dropped to 3.3% YoY around the same time from the past perusing of 3.4%, over the market agreement of 3.2%. Financial backers guess that the ECB will likely cut loan costs in April, adding to the Euro’s new shortcoming.

The French Industrial Output and Budget Balance for December will be due later on Friday. Additionally, on Friday, BoE Chief Economist Huw Pill is scheduled to speak.

About the author

Nafees Saifi // entrepreneur, author, trainer, and stocks and FX trader. 
Nafees Saifi is a professional FX trader from, India. Nafees has extensive experience trading commodities, bonds, and equity futures in the Asian, European, and US markets. Nafees holds a Bachelor of Finance and Economics degree and is focused heavily on Investment Finance and Quantitative Analysis.

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