EURGBP rises from its weekly bottom to around 0.8800. After Spain’s inflation data, the euro picks up steam before the ECB. The EURGBP is increasing on Monday after three straight days of declines.

The most recent set of economic figures for the Eurozone is helping the euro recover from weekly lows near 0.8755 and challenge the 0.8800 point ahead of monetary policy announcements.

EURGBP hectic week

Statistics made public on Monday revealed that Spain’s inflation startled to the positive. In Spain, the Aligned Consumer Price Index increased to 5.8% in January from 5.5% in December, exceeding the 4.8% market expectation.

This increase, that was the first since July, helped to confirm predictions for a hardline European Central Bank (ECB). Tuesday is when more Euro Zone inflation numbers are expected.

According to preliminary figures, Germany’s GDP shrank by 0.4% in the fourth quarter while a flat reading was anticipated. In the Eurozone, consumer confidence increased to -20.9 in January, while economic optimism likewise increased slightly to 99.9.

Following the results, the yields on Eurozone government bonds increased, strengthening the currency globally. The yield on the German 10-year bond increased to 2.32%, the highest point after January 6.

The ECB will meet to discuss monetary policy on Thursday. A rate increase of 50 basis points is anticipated. The meeting’s key elements will be the announcement and any hints as to the next course of action.

UK Prime Minister Rishi Sunak declared he would not increase taxes to pay for wage rises for employees of the Health Service. Sunak sacked Nadhim Zahawi, the head of the Conservative Party, over the weekend due to a tax dispute.

Although many observers anticipated a lesser increase, the Bank of England is anticipated to lift its benchmark interest rate by 50 basis points on Thursday. The Monetary Policy Committee is divided, and this week is expected to see more of it.

A volatile week is predicted for the EURGBP cross, especially on Thursday, the day of the central bank. The cross is challenging the 20-day Simple Moving Average and the 0.8800 zone as it moves laterally before to those key moments. On the upswing, 0.8860 represents the nearest significant resistance. On the other hand, a close under 0.8730 ought to pave the way for further losses.

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