The EUR/GBP cross gains momentum to near 0.8330 during the early European session on Friday. Sterling (GBP) weakens after the release of UK Retail Sales data for October. Later on Friday, traders await the preliminary HCOB Purchasing Managers Index (PMI) and the European Central Bank’s (ECB) President speech for fresh impetus.
Data released by the Office for National Statistics (ONS) on Friday showed that UK declined 0.7% MoM in October versus a 0.1% increase (revised from 0.3%) in September. This figure came in below the market consensus of -0.3%. Meanwhile, Retail Sales, stripping the auto motor fuel sales, fell by 0.9% MoM in October, compared to a 0.1% rise (revised from 0.3%) in the previous reading, missing the estimation of a 0.4% decline.
The GBP attracts some sellers in an immediate reaction to the downbeat UK Retail Sales and acts as a tailwind for the EUR/GBP cross. The attention will shift to the preliminary UK S&P Global/CIPS PMI data, which is due later on Friday.
On the other hand, the rising speculation for more aggressive interest rate cuts by the European Central Bank (ECB) weighs on the shared currency. The ECB policymaker Yannis Stournaras said earlier this week that the central bank will reduce interest by 0.25% in December, with further cuts possible in 2025. Additionally, Bank of Italy governor Fabio Panetta said the ECB must commit to faster interest rate cuts in a bid to lift the Eurozone economy. However, Panetta also called on the ECB to ditch its current “meeting-by-meeting” guidance that avoids a longer-term commitment to its monetary policy. More By This Author:WTI Holds Steady Below $69.50 Amid Mounting Russia-Ukraine Tensions USD/CAD Softens To Near 1.3950 On Hotter Canadian CPI Data, Eyes On Geopolitical Risks USD/CAD Posts Modest Gains Above 1.4000, Canadian CPI Data In Focus
