GBP/EUR: Will UK Inflation Data Pull Pound Lower vs. Euro?

The Pound Euro (GBP/EUR) exchange rate is extending gains for a second straight session on Thursday.

The Pound is advancing despite weaker than forecast CPI inflation data yesterday. The July CPI print revealed that price rose 2% YoY in July, down from 2.5% in June and softer than the 2.3% forecast.

CPI in the Eurozone also came in weaker than forecast as -0.1% decline MoM. However, on an annual basis is ticker higher in Juky to 2.2%, up from 1.9% but in line with forecasts.

There is no high impacting UK or Eurozone data due. However, the FOMC minutes revealed that the Fed was looking at tapering bond purchases this year, lifting the US Dollar and dragging on the Euro.