The Eurozone’s Influential Gains
The EUR/GBP pair kept on climbing higher in the European trading session and subsequently gained up to a five-week top, reaching the 0.8440 zones in the early hours of Friday.
The pair consolidated on the recovery movement after Thursday’s ECB meeting, which took it from under 0.8300 points (a new two-year downtime) to gain a lot of traction for a second straight day, Friday.
The European Central Bank’s president, Christine Lagarde, agreed that there are growing inflation cases, and she refrained from her previous statement that it is not likely that there would be an interest rate increase this year. This became the reason for the pair’s average outperformance, and it instigated a number of follows-through short-term covering for the EUR/GBP pair.
A Struggling Pound Sterling
As a single currency on its own, the pound sterling is yet to take advantage of the Bank of England’s recent hawkish monetary policy-induced gains. Observers say this happened to be an additional factor that aided the increase of the EUR/GBP pair. It should be noted that the Bank of England increased the minimum interest rate by up to 25 basis points. However, the vote revealed that four members of the MPC nine voted to have the interest rates be increased by 50 basis points. The 25 basis points won by a slight margin.
Be it as it may, the basic background looks shifted to the advantage of bullish traders and encourages future investors to move for further short-term value appreciation. Market players are now expecting the publication of the United Kingdom’s construction Purchasing Managers’ Index and the Euro retail sales to give a new momentum.
Later on in the North American trading session, the American Non-farm Payroll report may introduce a measure of volatility into the stock market and then result in trading chances in the premises of the EUR/GBP pair.
Earlier in the week, the GBP/USD trading pair had traded marginally well though going back and forth around the high point it was two weeks prior, which was almost at 1.3575 as the financial market was preparing for the monetary policy decision of the Bank of England.
The pair had managed to increase steadily over a four-day period to go above the set 50 and 100 days’ EMAs, but it was, at that time, struggling hard to catch up with the set 200-day EMA before the Bank of England went into session.