18 Aug 2015
EUR/GBP: crawling along the support post big drop
FXStreet (Guatemala) - EUR/GBP is currently trading at 0.7043 with a high of 0.7116 a low of 0.7026.
EUR/GBP has been smashed on the back of the UK economy's performances across a number of data inputs that beat expectations on the board in London today. The CPI's rose to -0.2% vs -0.3 expected M/M while Y/Y fell in at 0.1% vs 0.0% expected. This puts the BoE in a position that markets have been pricing in. The UK may need a rate hike and a number of recent speeches and commentary from BoE officials are instigating quite a stir in the FX space, which is supporting flows in to the pound.
“We expect CPI inflation to stay very low for the rest of the year and then pick up in January, but the lower oil prices and strong sterling imply that the pickup will be smaller than previously anticipated”, explained analysts at Danske Bank,“As the BoE wants to see CPI inflation stabilise/move higher before hiking, we now expect it to deliver the first hike in Q1 16, most likely in February (previously November 2015)”.
GBP/USD has rallied on to the 1.57 handle, albeit attracting offers back to the mid point of the 1.56 handle and the cross has staged 10 pips shy of a full cent advance by the pound vs the euro, currently oscillating at the bottom of the drop, drifting along supper and last Monday's lows.
Technically, a break here could open up the 0.6990 June low . Beyond there we have the July low at 0.6937, and this would be the break down point to the 0.6541 2007 low.
EUR/GBP has been smashed on the back of the UK economy's performances across a number of data inputs that beat expectations on the board in London today. The CPI's rose to -0.2% vs -0.3 expected M/M while Y/Y fell in at 0.1% vs 0.0% expected. This puts the BoE in a position that markets have been pricing in. The UK may need a rate hike and a number of recent speeches and commentary from BoE officials are instigating quite a stir in the FX space, which is supporting flows in to the pound.
“We expect CPI inflation to stay very low for the rest of the year and then pick up in January, but the lower oil prices and strong sterling imply that the pickup will be smaller than previously anticipated”, explained analysts at Danske Bank,“As the BoE wants to see CPI inflation stabilise/move higher before hiking, we now expect it to deliver the first hike in Q1 16, most likely in February (previously November 2015)”.
GBP/USD has rallied on to the 1.57 handle, albeit attracting offers back to the mid point of the 1.56 handle and the cross has staged 10 pips shy of a full cent advance by the pound vs the euro, currently oscillating at the bottom of the drop, drifting along supper and last Monday's lows.
Technically, a break here could open up the 0.6990 June low . Beyond there we have the July low at 0.6937, and this would be the break down point to the 0.6541 2007 low.