EUR/GBP returns to growth, pound lacks good news

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A Scottish court ruled that the suspension of Parliament was unlawful and the uncertainty exacerbated the GBP. The EUR/GBP pair returns to the level of 0.8940 after three consecutive sessions of decline. Returning to the political situation in the UK, one should take into account the forecasts, which set out several worst-case scenarios in the event of the hard version of Brexit at the end of October. Analysts emphasize the high likelihood of riots, rising food prices and shortages of medical supplies. On the other hand, the euro also cannot find support. The German Consumer Price Growth Index is likely to fall by 0.2 percent in August compared with July and grow by 1.4 percent year on year. Additional data indicate a decrease in industrial production in the eurozone in July by 0.4 percent compared with the previous month and by two percent year on year, which is below market expectations.

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The sale of the British pound also caused a slight downward correction after recent positive results. Sterling will remain under scrutiny, as political pressure has not subsided, and the issue with Brexit has not been resolved. Now everyone is looking at the events taking place in the political arena of Great Britain during the period of "inaction" of the Parliament, which will begin its work in mid-October, it is expected that the queen will personally deliver a speech. At the same time, we remember that the Bank of England recently ruled out "negative interest rates" and expressed its opinion about the "likelihood of a recession in the country."

The material has been provided by InstaForex Company - www.instaforex.com