In the early European session on Friday, EUR/GBP drops to about 0.8650.
Upbeat UK PMI and hotter-than-expected UK July inflation figures reduce the likelihood of BoE rate cuts this year.
The August German Composite PMI and Eurozone PMI numbers were better than anticipated.
The EUR/GBP exchange rate is trading at 0.8650 in the early European session on Friday, with slight losses. The Pound Sterling (GBP) is supported by the idea that the Bank of England (BoE) may be reluctant to lower interest rates for the rest of the year. Later on Friday, Germany will disclose its second-quarter GDP (gross domestic product) figures.
The Bank of England (BoE) is set to postpone any interest rate reduction after UK inflation increased to a hotter-than-forecast 3.8% in July due to rising food and transport expenses. Additionally, the GBP's upward movement is supported by the positive preliminary UK S&P Global Purchasing Managers' Index (PMI) data for August. According to the data, the Composite PMI exceeded the consensus of 51.6 and increased more quickly to 53.0 in August from the previous figure of 51.5.
Earlier this month, the UK central bank resumed what it calls a "gradual and prudent" strategy to monetary easing, lowering interest rates from 4.25% to 4.0%. March 2026 is when a quarter-point cut is fully priced in.
The European Central Bank's (ECB) intentions to decrease interest rates further this year were complicated by the August economic resilience revealed by the HCOB PMI data from Germany and the Eurozone. New orders and increases in manufacturing output propelled Germany's Composite PMI to 50.9 in August. This number reached its highest point since March.
In August, the Eurozone Composite PMI increased from 50.9 to 51.1. The ECB might become more hesitant about further rate decreases as a result of these stories. The substantial impact of trade tensions earlier this year, according to economists, may limit the upside for the shared currency and introduce still another level of complexity to the ECB's decision-making process.
Later on Friday, Germany's GDP report—which is predicted to expand 0.4% YoY in Q2—will provide traders with additional guidance. If the report's results are better than anticipated, this could help keep the EUR's short-term losses to a minimum.
Upbeat UK PMI and hotter-than-expected UK July inflation figures reduce the likelihood of BoE rate cuts this year.
The August German Composite PMI and Eurozone PMI numbers were better than anticipated.
The EUR/GBP exchange rate is trading at 0.8650 in the early European session on Friday, with slight losses. The Pound Sterling (GBP) is supported by the idea that the Bank of England (BoE) may be reluctant to lower interest rates for the rest of the year. Later on Friday, Germany will disclose its second-quarter GDP (gross domestic product) figures.
The Bank of England (BoE) is set to postpone any interest rate reduction after UK inflation increased to a hotter-than-forecast 3.8% in July due to rising food and transport expenses. Additionally, the GBP's upward movement is supported by the positive preliminary UK S&P Global Purchasing Managers' Index (PMI) data for August. According to the data, the Composite PMI exceeded the consensus of 51.6 and increased more quickly to 53.0 in August from the previous figure of 51.5.
Earlier this month, the UK central bank resumed what it calls a "gradual and prudent" strategy to monetary easing, lowering interest rates from 4.25% to 4.0%. March 2026 is when a quarter-point cut is fully priced in.
The European Central Bank's (ECB) intentions to decrease interest rates further this year were complicated by the August economic resilience revealed by the HCOB PMI data from Germany and the Eurozone. New orders and increases in manufacturing output propelled Germany's Composite PMI to 50.9 in August. This number reached its highest point since March.
In August, the Eurozone Composite PMI increased from 50.9 to 51.1. The ECB might become more hesitant about further rate decreases as a result of these stories. The substantial impact of trade tensions earlier this year, according to economists, may limit the upside for the shared currency and introduce still another level of complexity to the ECB's decision-making process.
Later on Friday, Germany's GDP report—which is predicted to expand 0.4% YoY in Q2—will provide traders with additional guidance. If the report's results are better than anticipated, this could help keep the EUR's short-term losses to a minimum.
