- Pound pauses a five-day of selling pressure against the EUR
- German inflation fell slightly in July to 7.5%
- Markets cheer prospects of peak inflation
- Germany’s DAX and UK’s FTSE 100 posted gains
The Pound Euro (GBP/EUR) exchange rate paused a five-day sell-off and experienced a relief rally as soft US inflation boosts rate hopes. The pair appreciated by +0.34% in the previous session settling on Wednesday at €1.1863, after trading in a range between €1.1805 – €1.1878.
At 06:11 UTC, GBP/EUR trades -0.04% at €1.1857.
Meanwhile, price pressures have eased in Germany confirming the market consensus. German inflation fell slightly in July to a 7.5% year-over-year reading. However, food prices rise higher in Europe’s largest economy rising by 14.8%.
The final reading of Germany’s HICP inflation for July also came in line with the market expectation rising by 8.5%.
Softening of inflation in both the US and the EU cheers global stock markets. The DAX Index, the benchmark index for the German equity market settled +1.23% at 13,700 on Wednesday while UK’s FTSE 100 settled up +0.53% at 7,520.
In the Eurozone, investors are now anticipating a 50 basis points rate hike at ECB’s September meeting. On the other hand, the Bank of England (BoE) is well ahead of the ECB in its tightening cycle. The BOE hiked its deposit rate by 50 basis points to 1.75%.