Eurgbp Moves To Yearly Lows

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Eurgbp Moves To Yearly Lows

Eur/Gbp Moves Back To Multi-Year Lows

EUR/GBP is trading on a weaker note on Thursday and appears to be consolidating. The pair is once gain near its 2-year lows and is trading at the lowest level in the 5-week range.

The weakness in the EUR/GBP came after the release of Germany's Export and Industrial Production data. These data releases weighed heavily on the EUR, sending the EUR/GBP lower.

Germany'S Exports Declines In September

It seems that Germany had a bad month, as September's exports declined by 1.7%. This was lower than the earlier reading and the forecasts made by the experts.

The EUR/GBP pair then made some recovery after the release of positive Eurozone Retail Sales data. Despite this, we can't deny the fact that EUR/GBP is hovering at multi-year lows.

The EU's Retail Sales for September increased by 2.9% y/y, while August's reading was revised higher to 2.3%. The retail sales data also exceeded the forecast by 1.3%.

The Retail Sales on a m/m basis also jumped by 0.5% against the forecast of 0.4%. Meanwhile, last month's reading was 1.1%.

For now, the EUR/GBP is trading at nearly 0.8300s after the BoE's meeting. The BoR decided to lower the policy rate by 0.25% which was not a good news for the GBP.

Generally, a rate cut is bad for the GBP but it was different in the case of the EUR/GBP. The bottom line is that the interest rate in the UK is still higher as compared to the European Union which is around 3.4%.

So, as far as the interest rate is concerned, the GBP still has the upper hand against the EUR. That's a key reason why the EUR/GBP is now hovering at historic lows.

Also, there is a lot of uncertainty right now as the UK government is expected to announce the autumn budget. This makes it difficult for the BoE to adjust its policy ahead of time.

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