- GBP to EUR pair is down for the 5th straight session
- EUR steady as odds of another ECB 50 bps rate hike in September increases
- German inflation rate to peak at 7.5%
- US inflation data eyed next
The Pound Euro (GBP/EUR) exchange rate drops for the fifth day in a row as traders are eyeing key inflation reading from the EU and US. The pair declined -0.24% in the previous session settling on Tuesday at €1.1822, after trading in a range between €1.1860 – €1.1817.
At 05:55 UTC, GBP/EUR trades +0.05% at €1.1828.
The annual inflation rate in Germany is expected to flatten at 7.5% in July according to the German federal statistical office. Month-over-month, the Germany Consumer Price Index (CPI) is projected to remain unchanged compared to June and show an increase of 0.9%.
Consumer prices in the continent’s biggest economy remain well above ECB’s price stability target of around +2%. As such, the European Central Bank’s interest rate hike cycle is expected to pick up steam and consequently weigh on the EUR exchange rate.
The European Central Bank is expected to raise its benchmark interest rate by another 50 basis points in September.
At the same time, the EU-harmonized annual inflation rate in Germany is expected to remain at an all-time high reading of 8.5% in July versus an increase of 8.2% in June.
Looking forward, the focus will also turn to US inflation figures which can add an extra level of volatility.