Pound Surges as BoE's Pill Backs Higher Interest Rates

The EUR/GBP pair saw a sharp decline on Friday as the British Pound (GBP) continued its upward momentum following hawkish comments from Bank of England (BoE) committee member Huw Pill. The Pound rallied across the board after Pill's remarks, with the EUR/GBP pair retreating from one-month highs above 0.8600 and testing support at a previous resistance area around 0.8585.

Pill emphasized the need to raise the BoE's bank rate to 4%, stating that 'clear, prompt and decisive policy action and communication would help steer markets and reduce uncertainty.' This comment provided a fresh boost for the Sterling against its main peers.

On the economic front, data from Germany showed an increase in Factory Orders of 2.5% in July, exceeding market analysts' forecast of a 0.3% rise. The Eurozone Retail Sales are expected to show a bounce-up of 0.3% in July, reversing June's 0.3% drop.