After Germany's finance ministry announced a 2.6% YoY increase in federal and state tax income for September, the EUR/GBP remains stable.
For the second consecutive year, Germany's economy contracted in 2024, and the government only projected a meager 0.2% increase in 2025.
Because of the cautious prognosis for BoE policy, the value of the pound sterling may increase.
After two days of losses, EUR/GBP recovers, trading Tuesday during Asian hours at about 0.8690. Following Germany's finance ministry's announcement that federal and state government tax receipts increased 2.6% year-over-year in September, the currency cross gains value as the Euro (EUR) may receive support. On Tuesday, the German government did add, though, that economic momentum will not immediately increase tax receipts.
In 2024, the biggest European economy shrank for the second year in a row, and the government only forecasted 0.2% growth in 2025. According to Reuters, the research stated that there are no indications of "a noticeable acceleration in economic momentum in the short term" based on leading indicators.
The Euro, however, suffered as traders balanced the improvement in global risk sentiment against the downgrade of France by S&P Global Ratings. France's credit rating was downgraded from AA- to A+ by S&P, which cited "elevated" budget uncertainty even after the government submitted its 2025 draft budget.
The cautious tone around the Bank of England's (BoE) policy outlook, which is fueled by the ongoing inflation in the United Kingdom (UK), may provide support for the pound sterling (GBP), which could cause the EUR/GBP cross to lose ground once more.
To get new momentum on whether the BoE will lower interest rates again in the rest of the year, traders will probably watch the UK Consumer Price Index (CPI) and Retail Sales data that is due on Wednesday. Last month, Andrew Bailey, the governor of the Bank of England, stressed that the UK central bank was "not out of the woods yet" regarding inflation.
Nonetheless, the UK labor market data for the three months ending in August revealed a further rise in the unemployment rate and a slowing in wage growth. The BoE is now more likely to lower borrowing rates before the end of the year.
For the second consecutive year, Germany's economy contracted in 2024, and the government only projected a meager 0.2% increase in 2025.
Because of the cautious prognosis for BoE policy, the value of the pound sterling may increase.
After two days of losses, EUR/GBP recovers, trading Tuesday during Asian hours at about 0.8690. Following Germany's finance ministry's announcement that federal and state government tax receipts increased 2.6% year-over-year in September, the currency cross gains value as the Euro (EUR) may receive support. On Tuesday, the German government did add, though, that economic momentum will not immediately increase tax receipts.
In 2024, the biggest European economy shrank for the second year in a row, and the government only forecasted 0.2% growth in 2025. According to Reuters, the research stated that there are no indications of "a noticeable acceleration in economic momentum in the short term" based on leading indicators.
The Euro, however, suffered as traders balanced the improvement in global risk sentiment against the downgrade of France by S&P Global Ratings. France's credit rating was downgraded from AA- to A+ by S&P, which cited "elevated" budget uncertainty even after the government submitted its 2025 draft budget.
The cautious tone around the Bank of England's (BoE) policy outlook, which is fueled by the ongoing inflation in the United Kingdom (UK), may provide support for the pound sterling (GBP), which could cause the EUR/GBP cross to lose ground once more.
To get new momentum on whether the BoE will lower interest rates again in the rest of the year, traders will probably watch the UK Consumer Price Index (CPI) and Retail Sales data that is due on Wednesday. Last month, Andrew Bailey, the governor of the Bank of England, stressed that the UK central bank was "not out of the woods yet" regarding inflation.
Nonetheless, the UK labor market data for the three months ending in August revealed a further rise in the unemployment rate and a slowing in wage growth. The BoE is now more likely to lower borrowing rates before the end of the year.
