Euro Sinks Against Pound as Eurozone Inflation Meets Expectations

The Euro (EUR) dropped to session lows against the British Pound (GBP) on Friday, reaching 0.8554 after the release of the Eurozone's preliminary inflation figures for July.

The data showed that the Harmonized Index of Consumer Prices (HICP) accelerated to a 2.9% year-on-year growth in July, meeting market expectations.

The monthly inflation rate rose by 0.2%, reversing the 0.1% contraction seen in June.

In contrast, the Pound received some support from Thursday's Bank of England (BoE) monetary policy decisions, which left interest rates on hold but hinted at a potential rate hike later this year due to rising oil prices.

However, analysts at TD Securities warned that 'other than the vote split, it would appear to us the rest of the committee is still very comfortable keeping rates on hold, given the lack of clear second-round effects observed in inflation data.'