EUR/GBP consolidates its losses around the mid-0.8600s ahead of the German trade data

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• EUR/GBP oscillates around the 0.8647-0.8661 region in a narrow trading band on Thursday.
• Eurozone Retail Sales came in at -2.1% YoY in August vs.-1%, worse than expectation.
• UK’s S&P Global/CIPS Composite PMI and Services PMI for September came in above the market consensus.
• Traders will monitor the German Trade Balance for August due later on Thursday.

The EUR/GBP cross consolidates its recent losses around the mid-0.8600s during the Asian session on Thursday. Market players await the German Trade Balance data for August ahead of the European Central Bank (ECB) official’s speech later on Thursday. The cross currently trades near 0.8654, losing 0.02% for the day.

On Wednesday, the Eurozone Retail Sales dropped 2.1% YoY in August from the previous reading of a 1% fall, worse than the expectation of a 0.3% decline. On a monthly basis, the figure fell by 1.2% versus a 0.1% drop prior. Additionally, the Eurozone Producer Price Index (PPI) declined by 0.6%, matching the market expectation.

Markets expect the European Central Bank (ECB) to keep interest rates unchanged in the next meeting. On Wednesday, ECB Governing Council member Mario Centeno said that inflation in the Eurozone declined faster than it was rising and that the central bank may anticipate the rate cycle to be finished by now, while ECB Vice President Luis de Guindos remarked that the ECB would continue to take a data-driven approach.

On the other hand, the stronger UK economic data lifts the British Pound (GBP) against the Euro. Both the UK’s S&P Global/CIPS Composite PMI and Services PMI for September came in above the market consensus but remained below 50 in contraction territory.

Looking ahead, market players will focus on the German Trade Balance for August ahead of the ECB Philip Lane’s speech. On Friday, the UK’s Halifax House Prices data and German Factory Orders will be released. These figures could give a clear direction to the EUR/GBP cross.