The EUR/GBP pair trims its early losses and edges higher toward the 0.8680 mark during late Asian trading on Thursday. The modest rebound comes as investors largely shrug off weaker-than-expected preliminary Eurozone inflation figures for December.
Data released by Eurostat on Wednesday showed headline Harmonized Index of Consumer Prices (HICP) rising 2.0% year over year, in line with forecasts but slightly below November’s 2.1%. Core HICP—which excludes volatile components such as food, energy, alcohol, and tobacco—slowed to 2.3%, missing expectations and easing from the previous 2.4%.
On a monthly basis, both headline and core inflation rebounded, increasing by 0.2% and 0.3% respectively, after posting declines in November.
Despite the softer inflation print, the figures are not expected to significantly alter market expectations for near-term interest rate cuts from the European Central Bank, as inflation remains close to the ECB’s 2% target.
Later in the session, attention will turn to remarks from ECB Vice President Luis de Guindos, who is scheduled to speak at a fireside chat during Vicente’s second edition of Next Spain Global at 08:30 GMT.
Meanwhile, the Pound Sterling shows mixed performance against major peers amid a quiet UK economic calendar. In the absence of key data releases, GBP price action is being guided mainly by broader risk sentiment and expectations surrounding how the Bank of England’s monetary policy stance may evolve in the months ahead.
