Euro Surges Against Pound as Eurozone Inflation Accelerates to 2.9%

The Euro has extended its gains against the British Pound for the fifth consecutive day, reaching session highs above 0.8550.

This upward trend is attributed to the acceleration of price pressures in the Eurozone, as confirmed by the final Harmonised Index of Consumer Prices (HICP) figures released on August 19th.

The HICP YoY rate rose to 2.9% in July, from 2.8% in June, while the Core HICP also increased to a 2.5% Y-o-Y growth rate in July, up from 2.4% in the previous year.

These figures have strengthened the case for an interest rate hike by the European Central Bank (ECB) in September, particularly after ECB official Olli Rehn reiterated that 'keeping inflation expectations anchored is essential'.