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EUR/GBP Holds Support Ahead of U.K. CPI

EUR/GBP Holds Support Ahead of U.K. CPI

David Song, Strategist

EUR/GBP

EUR/GBP Daily Chart

Chart - Created Using FXCM Marketscope 2.0

The longer-term outlook for EUR/GBP remains tilted to the downside amid the deviating paths for monetary policy, but the pair may consolidate in the week ahead as it largely retains the opening monthly-range for November.

With a slew of ECB officials scheduled to speak in the week ahead, a greater willingness to cut the deposit-rate at the December 3 interest rate decision may dampen the appeal of the single-currency especially as central bank President Mario Draghi continues to endorse a dovish outlook for monetary policy. At the same time, stickiness in the core UK CPI may boost interest rate expectations as the BoE largely stays on course to normalize monetary policy, and the euro-pound remains at risk of giving back the rebound from back in July (0.6930) as Governor Mark Carney continues to prepare households and businesses for higher borrowing-costs.

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