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Euro reaches six-month high against pound amid UK economic woes

Published 11/12/2023, 02:01 AM
Updated 11/12/2023, 02:03 AM
© Reuters.

The Euro has ascended to a six-month peak against the Pound Sterling, capping off a week with consistent gains as the EUR/GBP pair approached 0.8750. This rise comes despite mixed economic data from both the European Union and the United Kingdom, where the UK's figures have notably underperformed even when exceeding forecasts.

At the close of the week, the Euro's strength was evident as it nearly hit the 0.8750 mark against the Pound. The upward trajectory has been consistent since August, when the EUR/GBP saw low closes around 0.8520. The momentum is illustrated by the 50-day Simple Moving Average (SMA), which has accelerated from 0.8660 towards a bullish cross of the 200-day SMA, currently near 0.8690.

Contrary to market expectations for a decline, the UK's Gross Domestic Product (GDP) remained steady at 1.5% year-on-year into September. Additionally, UK Manufacturing Production stayed flat at 3%, contrary to predictions that it would edge up to 3.1%. This stagnation comes after an earlier dramatic adjustment from 28% to a stark 3%.

Looking ahead, a suite of key economic indicators is set to be released in the coming week. On Tuesday, investors will eye the UK labor and wage data alongside the EU's third-quarter GDP figures. Wednesday will see the UK's Consumer Price Index (CPI) inflation data and the EU's Industrial Production numbers come to light. The week will conclude with Friday's announcements of UK Retail Sales and EU's Harmonized Index of Consumer Prices (HICP).

Investors and analysts alike will be closely monitoring these releases for indications of economic health and potential impacts on currency valuations in a market that continues to weigh mixed signals from two of Europe's leading economies.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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