The Euro (EUR) remains on the defensive against the British Pound (GBP) on Friday, with the EUR/GBP pair unable to take off from one-year lows at the 0.8515 area.
Data from Germany and France confirmed that inflationary pressures moderated in June, which added pressure on the common currency
In Germany, the final Harmonized Index of Consumer Prices (HICP) confirmed previous estimations showing that inflation grew at a 2.4% year-over-year (y-o-y) rate in June, down from 2.7% in May and from April’s 2.9% peak. Monthly inflation contracted 0.2%, also in line with preliminary estimations, following a 0.1% contraction in May. Likewise, France’s Consumer Price Index (CPI) confirmed that yearly inflation eased to a 2% y-o-y rate in June, from the 2.8% reading witnessed in May.
Monthly inflation contracted at a 0.3% pace, following a 0.1% uptick in the previous month. Eurozone data hints at an ECB pause in July These figures cement expectations that the European Central Bank will hit the pause button at the July meeting, buying time to assess developments in energy markets and their impact on the Eurozone’s economy. The Pound, on the other hand, has drawn some support from comments by the Bank of England’s (BoE) Chief Economist, Huw Pill, one of the two hawkish dissenters at the latest BoE monetary policy meeting, pointing to upcoming rate hikes.