Despite the market’s indecisiveness, the EUR/GBP consolidates its strongest advances in a week.
The Labour Party of the United Kingdom has won a by-election in Northern England, surprising the political establishment.
Weidman of the European Central Bank advocated for tapering, and Lagarde was looking ahead to next week’s surprise meeting.
Merkel of Germany will visit the United Kingdom, and the EU’s travel ban will be a major factor.
Heading into Friday’s London begin, EUR/GBP sellers are flirting with the 0.8600 level, down 0.07 percent intraday. The cross-currency pair reached its highest level since mid-June the day before reversing from 0.8615.
As a result, the quotation maintains recent advances despite the market’s cautious tone ahead of significant data/events. The visit of German Chancellor Angela Merkel to the United Kingdom, as well as a speech by ECB President Christine Lagarde, are among them.
With the annual peak of coronavirus (COVID-19) cases in the United Kingdom, Germany campaigned for an EU ban on all British travelers, regardless of their jabbing status. The same underscores today’s London-Berlin meeting in the United Kingdom, where Merkel may seek to maintain excellent ties with British politicians in her final days as the bloc’s most powerful woman.
“British Labour leader Keir Starmer earned a boost in northern England on Friday, beating off a challenge from the ruling Conservatives to hang on to a parliamentary seat that, if lost, would have heaped pressure on him to stand down,” according to Reuters.
Also weighing on EUR/GBP prices are statements from European Central Bank (ECB) Governing Council member and Bundesbank President Jens Weidman, which signal a German drive for tapering. On the contrary, Governor Andrew Bailey of the Bank of England took a step back from his previous positive stance on inflation on Thursday, restoring confidence in the central bank’s easy monetary policy.
Above all, market jitters ahead of the important US employment report, Merkel’s visit to the UK, and ECB President Lagarde’s speech appear to be limiting EUR/GBP movement.
The 50-day moving average (DMA) is probing a two-month-old resistance breakout that is now support, but bullish MACD and a firmer Momentum line favor EUR/GBP buyers./n
