The EUR/GBP is in focus as German consumer prices lead a host of data releases from the UK and European economies on Friday.
EURGBP – 4H Chart
The price of EUR/GBP has found a floor at 0.8720 and initial resistance at 0.8757. The data could determine whether the bounce continues or fails at this level.
The Harmonized Index of Consumer Prices from the German economy is released at 2:00 pm HKT. Analysts expect a reading of 2.6%, the same as the previous month. However, any shift in the number could drive the exchange rate.
UK data is released at the same time as GDP growth, industrial and manufacturing data. However, the GDP is a confirmation, and the others are mid-level drivers. Further data at 2:45 pm and 3:30 pm come from consumer prices in France and Spain.
The British pound has found some relief after the government budget eased fears of economic struggles in the UK. But both the UK and EU economies are seeing minimal growth.
Britain’s ‘anti-business’ budget will leave the economy ‘stuck in low gear,’ the British Chamber of Commerce said.
“Businesses will be steering through choppy waters once again next year after a Budget that lacked the growth measures so desperately needed,” the group said.
Another problem looming for the EU is a potential economic conflict with the United States. The EU is not happy with the Ukraine peace deal, and there are rumours that the EU may dump U.S. debt if Russia signs the Trump-led peace deal. Trump also took a swipe at the region’s leadership on immigration and trade.
‘They don’t know what to do. Europe doesn’t know what to do. They don’t know what to do on trade either,” he said. “They want to be politically correct, and it makes them weak. That’s what makes them weak.
Rising natural gas prices could again pressure Europe if the weather worsens, as supply is limited by Russian sanctions. Threats from U.S. lawmakers to leave NATO could also leave the Eurozone in a difficult position.
