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- EUR/GBP extends gains as effect of downbeat UK economic data.
- German PPI declined significantly higher than anticipated in July.
- Traders seek fresh impetus, awaiting economic data releases from both economies.
EUR/GBP trades higher around 0.8560, continuing the winning streak for the second day. The downbeat trade data released from the United Kingdom (UK) on Friday, undermined the Pound Sterling (GBP), potentially contributing to the strength of the EUR/GBP pair. As said, UK Retail Sales declined 1.2% in July on month, swinging from a 0.6% increase in June and significantly below the 0.5% decline that was expected for July.
On the other hand, the EUR/GBP pair could face downward pressure due to Monday’s German data release of the Producer Price Index (PPI) (MoM) declined 1.1%. It was significantly higher than the expectation of a 0.2% decline in the month of July, compared to the previous reading of -0.3%. While, year-on-year PPI declined to 6% against the expectation of a 5.1% decline, swinging from the previous rate of 0.1% growth.
The market participants will closely watch the upcoming data releases of HCOB PMI and Gross Domestic Product (GDP) from Eurozone later in the week. European Central Bank’s (ECB) Monetary Policy Meeting Accounts are set to release on Thursday, followed by ECB’s President Lagarde speech on Saturday.
On the UK docket, investors will also watch the releases of PMI surveys along with GfK Consumer Confidence data for August. These datasets could provide valuable insights about the state of both economies, potentially helping traders in making decisions involving the EUR/GBP pair.
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