Euro Stabilizes Against GBP Amid German Industrial Slump

The Euro's losses against the British Pound were tempered by an unexpected drop in German industrial production for July. On an annual basis, Industrial sector activity fell by 1.6% YoY in July, compared to a decline of 0.5% in June.

Capital Economics' chief Europe economist Andrew Kenningham expects the European Central Bank (ECB) to raise its key interest rates by 25 basis points at its upcoming monetary policy meeting on Thursday.

The ECB's decision comes as markets expect the UK central bank to leave interest rates unchanged at 3.75% at its next meeting on September 17, though they are fully pricing in a quarter-point hike by the end of the year.