EURGBP has German and UK data ahead and will look to advance further.
EURGBP – Daily Chart
EURGBP trades at 0.8608 after moving lower on Tuesday. The euro will look for further gains above the 0.8650 level, while the pound will look for strength below the 0.8550 mark.
The currency pair awaits economic data from German consumer confidence and UK inflation. Both data sets will be released at 3pm HKT on Wednesday.
The German Gfk confidence number is expected to be -27 after -27.8 last month. However, some European figures have shown improvement in recent weeks.
The UK inflation rate is set to dip to 5.6% from 5.7%, which is still high for the British economy with its 2% inflation target. The German economy has been disappointing and is forecast to shrink slightly this year with minimal growth next year as demand from abroad is weak, government subsidies slow down, and high interest rates hurt business activity, the central bank said on Friday.
The Bundesbank’s projections for Europe’s largest economy showed a slightly smaller contraction in 2023 but a much weaker recovery in 2024 than previously thought.
The UK economy is not in much better shape, with accounting firm KPMG saying it is “limping”. In its latest global economic outlook, released this morning, it also said high interest rates and policy uncertainty are holding back global growth.
The company expects the UK’s GDP to rise by 0.5% in 2024, the same as in 2023, picking up to 1% in 2025.
For the near-term data, analysts will look for signs of strength, where German consumer confidence could lift the euro, or slower UK inflation could boost the pound.
