Euro Pound (EUR/GBP) Exchange Rate Muted as Eurozone CPI Edges Up
The Euro Pound Sterling (EUR/GBP) exchange rate remained muted and the pairing is currently trading at an inter-bank rate of £0.9030.
On Wednesday morning, data from Eurostat revealed that the Eurozone’s Consumer Price Index (CPI) increased higher than forecast in June.
Annual inflation rose by 1.3% in June, following May’s 13-month low of 1.2%.
Month-on-month, consumer prices edged up by a higher-than-forecast 0.2%.
However, this could do little to buoy the single currency as headline and underlying inflation rates remain below the European Central Bank’s (ECB) target of close to but below 2%.
Sterling (GBP) Flat as London House Price Growth Slides to Decade Low
Data from the Office for National Statistics (ONS) has shown that house prices in London have fallen at the fastest pace in around a decade.
Compared to May 2018, house prices in London were 4.4% lower in May 2019.
Meanwhile, the ONS also revealed that the UK Consumer Price Index (CPI) remained steady at 2% in June.
This meant that workers benefitted from real wage growth as wages rose by a better-than-expected 3.6% during the second quarter.
Commenting on this morning’s inflation data, Mike Hardie, Head of Inflation at the ONS stated:
‘The overall rate of inflation remains steady, with no change in pace this month. Petrol and diesel prices fell this year but rose a year ago, while clothes prices dropped by less than this time last year.’
Pound (GBP) Muted as Johnson and Hunt Declare Irish Backstop ‘Dead’
Meanwhile, Brexit pessimism battered Sterling as no-deal fears rose.
Both Tory leadership candidates, Boris Johnson and Jeremy Hunt hardened their position on the Northern Ireland backstop.
Both stated the backstop was ‘dead’ and rejected any idea of a time limit.
Sterling sentiment was dragged lower following reports Boris Johnson could make sure MPs would be unavailable to stop a no-deal Brexit before the 31 October deadline.
Reports suggested that Johnson would schedule the next Queen’s speech to ensure Parliament shuts before the Brexit deadline.
Euro Pound Outlook: Will Disappointing German PPI Weigh on EUR?
Looking ahead to Thursday, the Pound (GBP) could slide against the Euro (EUR) following the release of the UK retail sales.
If retail sales slump further than expected in June it could dampen sentiment in Sterling.
Meanwhile, at the end of the week the single currency could slide following the release of Germany’s Producer Price Index (PPI).
If German PPI slumps further than expected in June, it could cause the Euro Pound (EUR/GBP) exchange rate to slide.