Recently, the EUR/GBP exchange rate has been on a downward trend, although short-term fluctuations may occur. Since entering the descending channel, the EUR/GBP has been oscillating near the 9-day moving average (currently at 0.8327). If it fails to break through this moving average, buying interest will remain low.
Market sentiment is generally tense, especially with the upcoming release of the U.S. employment report this Friday, followed by next week's U.S. election. The market expects strong U.S. employment data to potentially trigger fluctuations, causing the EUR/GBP to attempt a break above 0.8333 before the weekend. However, the rising possibility of Trump's reelection, although affecting dollar-related rates, has limited impact on the EUR/GBP.
This Wednesday, Spain and Germany will release their preliminary October inflation data, which is crucial for the euro's movement. September's inflation data put pressure on the euro, and if inflation picks up this time, the euro will be bolstered. Otherwise, low inflation increases the likelihood of the European Central Bank accelerating interest rate cuts, potentially continuing to pressure the euro.
Regarding the pound, the market is closely watching the UK government's upcoming budget announcement this Thursday. If there is a tax increase, it might pressure the pound, as the market views this as a potential dampener on UK economic growth. However, some analysts suggest that the Chancellor may adopt a more expansionary policy to stimulate growth through fiscal spending, which would support the pound. Some forecasts suggest that if the policy is successful, the UK's economic growth rate could reach 0.50% by 2025, forcing the Bank of England to be more cautious in cutting rates, which would be beneficial for the pound.
