The post EUR/GBP falls back into familiar range after downward revision to Eurozone GDP appeared on BitcoinEthereumNews.com.

EUR/GBP falls back from the day’s highs after Eurozone GDP growth for Q2 is revised down.  The data increases the chances the ECB will cut interest rates in September, weighing on the Euro.  EUR/GBP is capped because of Sterling strength due to expectations the BoE will cut rates more slowly amid stronger growth.  EUR/GBP gives back early gains on Friday as traders sell the Euro (EUR) following the release of Eurozone Gross Domestic Product (GDP) data which showed a downward revision in the second quarter from the initial estimate. This brings the pair back down into the week’s range in the early 0.8420-30s.  Eurozone GDP grew at a slower 0.2% quarterly pace in Q2 compared to the 0.3% of the previous estimate, and below the 0.3% of Q1. The downward revision increases the chances the European Central Bank (ECB) will cut interest rates at its September meeting. This, in turn, weighs on EUR/GBP since lower interest rates are negative for the Euro because they reduce foreign capital inflows.  The slowdown in growth also plays into fears that too-high interest rates are stifling growth, reinforcing comments from ECB Executive Board member Piero Cipollone, who said, in an interview with a French newspaper this week that “there is a real risk that (the ECB) stance could become too restrictive.”  EUR/GBP is further capped by the strength of the Pound Sterling (GBP) which sees gains from investors’ view that the Bank of England (BoE) will take a shallower easing path – cutting interest rates at a slower pace – than most other central banks, including the ECB. The BoE is only expected to make a 0.25% cut before the end of 2024 as the recent run of strong data indicates the economy continues growing and services sector inflation remains high.  The ECB, on…

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Filed under: News - @ September 6, 2024 11:22 am