Eurgbp Remains Little Changed

 Eurgbp Remains Little Changed

Eur/Gbp Remains Little Changed On Uk Inflation Data

little bit of buying pressure was seen in the EUR/GBP, which sent the pair towards the daily highs near the 0.8560 level. This was in response to the UK CPI, which was softer than expected and allowed the EUR to gain against the GBP.

Despite the change, there's still not enough buying pressure in the EUR/GBP, which suggests that the cross continues to trade in a tight range.

Uk Inflation Surprises The Market

As per the data from the UK ONS, the headline CPI last month jumped by +0.6%, a lot lower than the forecast made by the economists. Meanwhile, the yearly inflation level also showed a declaration trend and sent it towards the lowest level in the last few years.

When we consider the fact that inflation is slowing down along with an ongoing recession in the UK, the economic picture doesn't look very good at all. As a result, the Bank of England now has all the reasons to cut rates in an attempt to support the declining economy.

Although this is good news for the UK stock market, the same can't be said about the British Pound (GBP). That's the reason behind the recent uptrend seen in the EUR/GBP.

Despite the soft reading, the inflation is still above the target set by the Bank of England. That's one reason why we have not seen a major upside in the EUR/GBP.

If we look at the EUR, it is not showing much of a movement as the ECB is also expected to cut rates starting from June 2024. So, that's also yet another reason why the upside in the EUR/GBP remains capped.

Given this scenario, the traders are reluctant to go all in when it comes to picking a side in the EUR/GBP. For now, the market sentiment shows that the safer play is to stay on the sidelines and wait for the upcoming BoE policy meeting.

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