British Pound (GBP) Latest: EUR/GBP Easing After Surprise UK Inflation Rise
GBP price, UK inflation, news and analysis:
- GBP/USD is rising gently after an unexpected increase in UK inflation last month.
- EUR/GBP is slipping back ahead of Thursday’s ECB meeting and a European Council summit that starts Friday to discuss an EU recovery fund.
GBP edges higher after UK inflation data
GBP/USD has been given a mild boost, and EUR/GBP is sliding modestly, after news of an unexpected increase in UK inflation in June to 0.6% year/year from 0.5% in May. Analysts polled by the news agencies had predicted a dip to 0.4% but the figure came in higher because of an increase in the price of gaming consoles during lockdown.
Meanwhile, UK consumer spending fell at a much slower rate last month as Covid-19 restrictions were eased, according to Visa’s UK consumer spending index. This report is not watched closely in the markets but GBP bulls may take heart from its finding that, on a monthly basis, spending rose a record 16.6% following an 11.2% increase in May.
EUR/GBP Price Chart, One-Hour Timeframe (July 9 -15, 2020)
Chart by IG (You can click on it for a larger image)
Looking ahead, the next moves in EUR/GBP will likely be determined by the outcomes of Thursday’s meeting of the European Central Bank’s rate-setting Governing Council and the European Council summit on Friday/Saturday to discuss the proposed EU recovery fund.
The ECB will likely leave Eurozone monetary policy unchanged but its president, Christine Lagarde, could potentially move the Euro at her press conference following the decision. Rather more important will be the attempts to reach agreement on the proposed €750 billion fund despite opposition from the “frugal four”: Austria, Denmark, the Netherlands and Sweden. A failure to agree is seen as probable but could still weaken EUR/USD and EUR/GBP.
Ahead of that, UK employment data due Thursday are not expected to move GBP, with analysts predicting a rise of 250,000 in claimants in June, down from a 528,900 increase in May.
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--- Written by Martin Essex, Analyst and Editor
Feel free to contact me on Twitter @MartinSEssex
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.