German HICP inflation rose to 2.8% year-over-year in July, boosting the Euro amid broader geopolitical tensions and rising oil prices.
The Euro trimmed losses against the British Pound on Wednesday, climbing above 0.8540 after German inflation data showed a sharper-than-expected rise. The Harmonised Index of Consumer Prices (HICP) accelerated to 2.8% year-over-year in July, up from 2.4% in June, driven by a jump in energy inflation to 7.3% from 2.7%.
The EUR/GBP pair remains below last week’s highs of 0.8580, reflecting persistent bearish pressure. Broader risk sentiment has been dampened by escalating Middle East tensions, including attacks on vessels in the Red Sea, which have pushed Brent crude prices above $88.00, a 13% increase from last week’s levels.
Rising oil prices add to inflationary concerns in the Eurozone, particularly for oil-importing economies. Meanwhile, the Pound has shown relative resilience, though UK economic data remains light this week, leaving investors focused on geopolitical developments and their market impact.