Euro Struggles Against Pound as UK Economic Data Looms

The Euro is struggling to gain momentum against the Pound ahead of key economic data releases from the UK. The EUR/GBP exchange rate is currently trading below its short- and longer-term moving averages, following a sharp drop in recent days.

Despite last week's European Central Bank (ECB) rate hike, which saw the deposit rate lifted to 2.50%, the Euro has failed to hold gains against the Pound. The UK's higher interest rates are keeping the Pound firm, with investors waiting for Wednesday's UK inflation report and Thursday's Bank of England decision.

UK headline annual inflation is expected to edge up to 3.1% from 2.9%, which could keep the BoE's hawkish minority in play and give the Pound another reason to hold against the Euro.