- EUR/GBP prints a fresh three-week low at 0.8620 as the ECB is expected to keep policy steady ahead.
- The Eurozone GDP for Q3 is expected to contract due to the consequences of higher interest rates.
- The Pound Sterling will dance to the tune of the UK factory data.
The EUR/GBP pair printed a fresh three-week low at 0.8620 on Wednesday as European Central Bank (ECB) Governing Council member and Bank of France President, Francois Villeroy de Galhau see monetary policy sufficiently restrictive.
ECB Villeroy warned that further policy tightening is not the right thing at this time amid a positive oil price outlook due to escalating Middle East tensions.
Meanwhile, the Eurozone economy is underperforming on the grounds of employment, output, and consumer spending, which are consequences of higher interest rates by the central bank. ECB policymaker Pablo Hernandez de Cos expects a negative reading of Gross Domestic Product (GDP) in the third quarter of 2023.
ECB policymakers have been emphasizing the need to keep interest rates higher for a longer period as the last leg of inflation could turn out sticky ahead. A survey from the ECB showed that Eurozone consumers see inflation three years ahead at 2.5% in August vs. 2.4% in July.
On the Pound Sterling front, investors await the United Kingdom factory data, which will be released on Thursday at 06:00 GMT. Investors see monthly Manufacturing Production contracting by 0.3% against the 0.8% contraction recorded for July. Monthly Industrial Production is foreseen to decline at a slower pace of 0.2% against a contraction of 0.7% in July. The monthly Gross Domestic Product (GDP) data is seen expanding by 0.5% against a decline of 0.5% in July.
Investors seem confused about the interest rate outlook after hawkish guidance from Bank of England (BoE) policymaker Katherine Mann, which supported for aggressively tightening approach this week. She discussed the need to bring down inflation to 2% and wipe out consumer inflation expectations.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stabilizes near 1.0500, looks to post weekly losses
EUR/USD extended its daily decline toward 1.0500 in the second half of the American session, pressured by the souring market mood. Despite the bullish action seen earlier in the week, the pair remains on track to register weekly losses.
GBP/USD falls below 1.2150 as USD rebounds
Following an earlier recovery attempt, GBP/USD turned south and declined below 1.2100 in the second half of the day on Friday. The negative shift seen in risk mood amid rising geopolitical tensions helps the US Dollar outperform its rivals and hurts the pair.
Gold advances to fresh multi-week highs above $1,920
Gold extended its daily rally and climbed above $1,920 for the first time in over two weeks on Friday. Escalating geopolitical tensions ahead of the weekend weigh on T-bond yields and provide a boost to XAU/USD, which remains on track to gain nearly 5% this week.
Bitcoin could be an alternative to US-listed companies but not in the short term
Bitcoin has dipped below $27,000, adding to the subdued cryptocurrency market sentiment. While short-term price concerns persist, analysts predict a rebound based on historical figures.
Nvidia Stock Forecast: NVDA slips as Biden administration attempts to close AI chip loophole
Nvida's stock price opened marginally lower on Friday after Reuters reported that the Biden administration is attempting to close a loophole that allowed Chinese companies access to state-of-the-art computer chips used for AI.