EUR/GBP consolidates near higher levels, maintaining the positive momentum from the previous session.
The Euro is supported by encouraging economic statistics, as the European Central Bank ensures growth with downside risk.
The sterling is under pressure due to the Bank of England’s negative outlook on inflation and interest rates.
In the early Asian trading hours on Friday, the EUR/GBP remained unchanged. In a 50-pip movement, the pair renewed its high near 86.20 from the previous day’s session.
The EUR/GBP currency pair is currently trading at 0.8606, up 0.03 percent on the day.
The euro rose as a result of the positive economic data. In May, the unemployment rate in the Eurozone fell to 7.9%, slightly below market expectations of 8.0 percent. In June, the IHS Markit Eurozone Manufacturing PMI reached a fresh high of 63.4.
In June, the annual inflation rate fell to 1.9 percent, down from a two-and-a-half-year high of 2% in May.
Meanwhile, Christine Lagarde, President of the European Central Bank (ECB), stated that the quick vaccination campaign has decreased the likelihood of extreme scenarios and improved the economic outlook. The view fueled speculation that the central bank might begin to talk about tapering.
Sterling, on the other hand, came under further pressure after Bank of England Governor Andrew Bailey stated that if inflation persists, the central bank will use its policy tools. The dovish approach ruled out the possibility of higher rates in the immediate future.
Furthermore, the IHS Markit/CIPS UK Manufacturing PMI came in at 63.9 in June, falling short of market expectations of 64.2.
For the time being, traders are waiting for the Euro Producer Price Index (PPI) data to provide new trading momentum./n
