EUR/GBP reclaims 0.8400 despite the postpone of ECB’s interest rate hike and geopolitical jitters
- EUR/GBP is driving towards 0.8440 despite the street cut the extent of the ECB’s interest rate to 30 bps.
- ECB has maintained the status quo on intensifying fears of stagflation in Europe.
- The UK’s docket will report GDP, Industrial Production, and Manufacturing Production.
The EUR/GBP pair is gaining higher despite the barricades of status quo maintained by the European Central Bank (ECB) on Thursday and the absence of a positive outcome from the peace talks in Turkey.
The resultant of the ECB’s monetary policy meeting on Thursday was the postponement of the interest rate hike till the tapering of the bond purchase program by the ECB, which is likely at the end of the 3rd quarter this year. In addition to soaring inflation, ECB has to fix the multiplier effects of Russia’s invasion of Ukraine now. The situation of stagflation is hovering in Europe and for that, the ECB has decided to take the bullet. This has also trimmed the extent of a 50 basis point (bps) interest rate hike to 30 bps now.
On the geopolitical front, the Russia-Ukraine peace talks have ended without any positive outcome on Thursday. Russia’s steadfast demand of Ukraine’s surrender has escalated the tensions as the latter may not hand over itself to Moscow. The escalation of the Russia-Ukraine war may pose more stress on the European economy.
For further direction, investors are waiting for the UK’s monthly Gross Domestic Product (GDP) numbers and Industrial Production and Manufacturing Production on Friday. UK’s GDP is likely to print at 0.2% higher than the previous figure of -0.2%.