EURGBP falls after German inflation reaches 70-year highs

The euro has been surging against the British pound due to the UK’s financial problems. 

But sterling was on the front foot today after German inflation soared again and we could see a further correction in the EURGBP pair.

EURGBP-Daily Chart

eurgbp chart september

The EUR/GBP exchange rate dropped to 0.8833 after seeing recent highs above 0.9200. Support for the euro starts at the 0.8700 level, with the 50-day moving average just below at 0.8650.

Inflation in Germany is now running faster than in the United Kingdom, and that will have alarm bells ringing for the European Central Bank. According to the latest figures, inflation hit 10.9 percent in September, which is the highest since the 1950s. The euro slumped as traders feared a recession was looming and the ECB was not moving fast enough on rates. On Friday, Eurozone inflation will be released, and it is expected to reach 9.7 percent in the economic zone.

Carsten Brzeski, economist at ING bank, told the FT that “inflation is running red hot in Germany” again, and that it was “hard to see” how another intervention by the European Central Bank would not be on the horizon. Four German economic institutions also lowered their expectations for the nation’s economic growth, expecting a recession in 2023.

“My choice would be 75 bps,” ECB policymaker Gediminas Simkus said at a conference on Thursday. “But 50 is the minimum.”

They now project that the economy will shrink by 0.4 percent in the year ahead, down sharply from the 3.1 percent forecast previously. Friday is a big day for the EURGBP with UK GDP figures, Italian and eurozone inflation, and German employment numbers released-traders should start there if they are seeking volatility.

Recent News
Start Trading Now !

Try our demo account for free to learn trading. When you’re ready, switch to a live account and start trading for real.

Popular posts
ATFX

Restrictions on Use

Products and Services on this website are not suitable for Hong Kong residents. Such information and materials should not be regarded as or constitute a distribution, an offer, solicitation to buy or sell any investments.

使用限制: 本網站的產品及服務不適合香港居民使用。網站內部的信息和素材不應被視為分銷,要約,買入或賣出任何投資產品。

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://atfxgm.eu/en/ to proceed.

ATFX

Restrictions on Use

AT Global Markets (UK) Limited does not offer trading services to retail clients.
If you are a professional client, please visit https://atfxconnect.com