EUR/GBP Plunges to Six-Week Lows on UK Data and Disappointing German Retail Sales

The EUR/GBP exchange rate has plummeted to six-week lows on Wednesday, with prices reaching sub-0.8550 levels.

The decline is attributed to UK data, which has endorsed recent claims by Bank of England officials to hike interest rates. Final UK Gross Domestic Product (GDP) data revealed that the economy grew at a 0.5% pace in the second quarter, and 1.4% from the same period last year.

However, in the Eurozone, German data disappointed, with Retail Sales contracting 0.4% in August, following a 2.5% fall in July. The Unemployment rate remained steady at 6.4%, although the Unemployment Change rose more than twice the market consensus.

The EUR/GBP chart falls 0.3% on the day, and intraday momentum indicators show deeply oversold levels, as the 4-hour Relative Strength Index (14) stands near 25, highlighting the stretched downward trend.