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EUR/GBP only slightly lower on strong UK eco data – KBC

FXStreet (Barcelona) - The KBC Bank Research Team notes that the euro declined temporarily on poor EMU PMI’s and see the reaction of EUR/GBP to be similar to the EUR/USD combination.

Key Quotes

“The reaction function of EUR/GBP is still a bit similar to the headline EUR/USD combination. The euro declined temporary on the poor EMU PMI’s. The news flow from the UK was (very) strong with good October retail sales and and decent CBI orders.”

“EUR/GBP is off the recent highs and dipped temporary to the 0.7875 area. Even so at the end of the day, the decline of EUR/GBP was limited (0.7990), given the data strength. Cable is off the recent low but the picture still looks fragile.”

“Earlier this week, we considered the rebound of sterling after the BoE minutes as slightly disappointing. This assessment remains in place after yesterday’s UK eco data."

"Even so, we have the impression that a top/tough resistance is building in EUR/GBP data. Has the EUR/GBP rally run its course? A cautious sell-on upticks can be reconsidered.”

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