EUR/GBP breaks a four-day decline and re-establishes the daily peak.
Concerns over the ECB’s lack of tapering and virus-related difficulties to the UK’s unlock benefit bulls.
As a result of the German trade figures, ECB President Lagarde’s statement has become significant.
As European traders prepare for Thursday’s bell, the EUR/GBP surges to a new intraday high of 0.8560, up 0.20 percent for the day. As a result, the cross-currency pair posts a daily gain for the first time in five days, casting doubt on the UK’s decision to ease virus-related activity limitations.
The six-month high of over 32,000 illnesses has prompted global officials, notably those from the World Health Organization (WHO), to cast doubt on UK Prime Minister Boris Johnson’s July 19 unlock deadline. “The prime minister Boris Johnson has failed to refute that his intention to eliminate all coronavirus restrictions on July 19 will push as many as 3.5 million individuals a week into self-isolation,” The Independent said.
Following the repeal of mandated face masks and social separation, UK Health Secretary Sajid Javid predicted that Covid-19 infections would rise to 100,000 per day.
Bloomberg, on the other hand, reported the news, citing anonymous officials and said, “European Central Bank policymakers have decided to lift their inflation aim to 2% and leave room to overshoot it when necessary.” On Thursday, the regional central bank will deliver the outcomes of a special meeting, the first in 20 years.
The EUR/GBP market is also troubled by Brexit concerns, as the EU and the UK continue to squabble about the NI protocol. Recently, UK Prime Minister Boris Johnson advised the region against making easy demands, while also predicting a Jewish exodus from Northern Ireland (NI) if he sticks to the previously struck arrangement.
It’s worth noting that the viral issues, as well as indecision over important central banks’ future decisions, are weighing on market mood. S&P 500 Futures pull back from a record high, while US 10-year Treasury rates rebound from their lowest level since February.
Because of the ECB President Christine Lagarde’s scheduled announcement, EUR/GBP traders will be cautious ahead of the release. The German trade numbers for June could also test the pair bulls. EUR/GBP may experience a decline if ECB policymakers show willingness to accept higher inflation in order to maintain their accommodative monetary policy. However, the covid problems and other risk drivers will receive attention.
Although the 100-day moving average, around 0.8610, is pressuring EUR/GBP prices towards the yearly low near 0.8470, the pair’s sellers are being tested by the two-week-old horizontal support around 0.8530 and the 0.8500./n
