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EURGBP SIGNAL 09-09-2022 : EURGBP advances towards a 16-month high at 0.8720, focus shifts to UK Inflation

TODAY EURGBP SIGNAL

EURGBP SIGNAL : EURGBP advances towards a 16-month high at 0.8720, focus shifts to UK Inflation

  • EUR/GBP is aiming to recapture its 16-month high at 0.8721 as ECB announced a 75 bps rate hike.
  • Truss announced a cap on energy bills to safeguard the interest of households.
  • UK inflation will accelerate further amid soaring energy prices.

EURGBP SIGNAL : The EUR/GBP pair is aiming to carry forward its two-day winning streak if it manages to cross Thursday’s high at 0.8712. The asset is ultimately focusing to recapture a 16-month high at 0.8720 as a historic rate hike by the European Central Bank (ECB) has infused fresh blood into the shared currency bulls. On a broader note, the cross is continuously moving higher for the past two weeks after a weak hiatus around 0.8600.

ECB President Christine Lagarde preferred the agenda of cooling down the red-hot inflation over growth prospects by announcing a bumper rate hike of 75 basis points (bps). The interest rate has been pushed higher to 1.25% and more escalation is already warned. The central bank will remain more data-centric ahead and won’t continue the pace in hiking critical rates.

The central bank has also come out with inflation projections and is expected to average at 8.1% in 2022, 5.5% in 2023, and 2.3% in 2024. The ECB held soaring energy and food prices and supply chain bottlenecks responsible for accelerating price pressures.

EURGBP SIGNAL : On the UK front, the pound bulls are facing the dual threat of a double-digit inflation rate and bleak long-term growth. Liz Truss, the next UK Prime Minister is attempting to return consumer confidence and has announced a cap on energy bills to safeguard households against the upcoming winter season. The demand for energy accelerates in winter season due to an increase in the usage of electrical appliances and heaters.

The novel cabinet has fixed a cap on energy bills, according to which, a typical household will pay no more than £2,500 a year on energy bills.

Going forward, the UK inflation rate will remain in limelight. Earlier, the headline Consumer Price Index (CPI) landed at 10.1%. The economic data is expected to accelerate further as energy prices have remained upbeat in August.

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FIRST CAPITALS brand is authorized and regulated in various jurisdictions.

First Capitals Limited (www.First Capitals.com/eu) is regulated by the Cyprus Securities and Exchange Commission with CIF license number 185/12, licensed by the Financial Sector Conduct Authority (FSCA) of South Africa, with FSP No. 46614. The company is also registered with the Financial Conduct Authority of the UK with number 600475.

First Capitals (www.First Capitals.com/uk) is authorised and regulated by the Financial Conduct Authority with license number 777911.

Exinity Limited (www.First Capitals.com/uk) is regulated by the Financial Services Commission of the Republic of Mauritius with an Investment Dealer License bearing license number C113012295.

Card transactions are processed via FT Global Services Ltd, Reg No. HE 335426 and registered address at Ioannis Stylianou, 6, Floor 2, Flat 202 2003, Nicosia, Cyprus, and via Exinity Services Ltd , Reg No. HE 400404 and registered address at Agiou Georgiou Makri, 64, Anna Maria Lena Court, Flat 201, 6037, Larnaca, Cyprus. Address for cardholder correspondence: backoffice@First Capitals.com.. Business location address: FIRST CAPITALS Tower, 35 Lamprou Konstantara, Kato Polemidia, 4156, Limassol, Cyprus.

Exinity Limited is a member of Financial Commission, an international organization engaged in a resolution of disputes within the financial services industry in the Forex market.

Risk Warning: Trading Forex and Leveraged Financial Instruments involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Trading non-leveraged products such as stocks also involves risk as the value of a stock can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results. Before trading, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. It is the responsibility of the Client to ascertain whether he/she is permitted to use the services of the FIRST CAPITALS brand based on the legal requirements in his/her country of residence.  Please read FIRST CAPITALS’s full Risk Disclosure.

Regional restrictions: FIRST CAPITALS brand does not provide services to residents of the USA, Mauritius, Japan, Canada, Haiti, Suriname, the Democratic Republic of Korea, Puerto Rico, Brazil, the Occupied Area of Cyprus and Hong Kong. Find out more in the Regulations section of our FAQs.

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