GBP/EUR rate shave spiked back up to 1.28 on the exchange during Thursday morning’s trading. The Pound was given a boost yesterday following news that the Eurozone has now slipped into deflation, which happen when there is drop in the overall costs of goods and services and the inflation level drops below 0%.
This news is not likely to breed investor confidence in the single currency and we may see Sterling continue through 1.28 during afternoon trading. I do feel the EUR will find support around 1.29 and we also need to consider the Bank of England’s (BoE) likely stance on the matter, which will be to control the Pounds value for fear of alienating the Eurozone as a trade partner even further.
Key data today includes the latest BoE interest rate decision at Midday, although we anticipate this to remain unchanged.
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