The EUR/GBP pair is trading near 0.8810 in Thursday’s Asian session, staying above the 0.8800 mark and near levels last seen in May 2023. The Euro is firm as traders look forward to German Industrial Production and Eurozone Retail Sales figures for September. Investors are also watching the Bank of England’s (BoE) interest rate announcement due later today.
Germany’s Industrial Production is projected to rebound by 3% on a monthly basis in September, after falling 4.3% in the previous month. On an annual basis, production dropped 3.9% in August.
Eurozone Retail Sales are forecast to rise by 0.2% MoM in September, slightly higher than the 0.1% growth recorded in August. Year-on-year sales are expected to hold steady at 1% growth.
The Euro is supported by expectations that the European Central Bank (ECB) will maintain a cautious tone in its next meeting, after keeping rates unchanged last week. The ECB highlighted stable inflation forecasts, steady economic growth, and ongoing uncertainty.
However, the upside for EUR/GBP may remain limited as the Pound is supported by expectations that the BoE will keep interest rates at 4% in November. Although recent cooling in inflation and wage growth has fueled market speculation about potential rate cuts ahead.
In the UK, Chancellor Rachel Reeves is set to present the November 26 budget, where she is expected to unveil tighter fiscal measures to address high borrowing levels. Reeves has hinted at possible tax increases and emphasized the need to control debt and spending.
