Thursday, September 28, 2023
HomeUncategorizedEUR/GBP finds buffer near 0.8420 despite possible German energy crisis ahead

EUR/GBP finds buffer near 0.8420 despite possible German energy crisis ahead

  • EUR/GBP opted to buy around 0.8420, however, looking for more evidence of a bullish reversal.
  • Disruption of gas supply to Germany due to unscheduled maintenance, fuelling concern about Germany’s energy crisis ‘s concerns.
  • New forecast for UK CPI of 18% wreaks havoc on Bank of England policymakers .

EUR/GBP pair tries to bounce back in Tokyo after ending downside approach The period is 0.8412. Common currency bulls are defending further downside despite soaring expectations of a potential future energy crisis in Germany.

Investors should be aware of the fact that Russia will stop gas supplies to Europe for the last three days of August, For unplanned maintenance to Germany in the Baltic Sea. The unexpected interruption of natural gas supply to Germany from the Nord Stream 1 pipeline will exacerbate the imbalance in the energy supply and demand mechanism. In addition, the arrival of winter in Germany will expand energy demand. And, more supply problems in the already fragile German energy market could accelerate the common currency sell-off.

Supportive Moves The cross also relies on mixed German Purchasing Managers’ Index (PMI) data. The Manufacturing Purchasing Managers’ Index was better than expected and the previously published 49.8. However, the services PMI contracted to 48.2, below expectations for 49 and the previously published 49.9.

On the GBP side, rising tensions over-surging price pressures are likely to force market participants to sell the pound. Inflation in the UK region remained unchanged from a four-year high of 10.1%. Now, analysts at U.S.-based Citibank have come up with new forecasts for U.K. consumer price inflation, which will peak at 18% in early 2023. Unchecked price pressures in the UK region are wreaking havoc on Bank of England (BOE) policymakers.

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