EUR/GBP oscillates around 0.8760 ahead of BOE policy

• EUR/GBP is juggling around 0.8760 as the focus shifts to BOE interest rate policy.
• The BOE is bound to hike interest rates despite bleak growth and a weak labor market.
• The German government is bailing out Uniper to make sure enough gas supply during winter season.

The EUR/GBP pair is displaying topsy-turvy moves in a narrow range of 0.8758-0.8767 range as investors are awaiting the announcement of the interest rate decision by the Bank of England (BOE). Earlier, the asset rebounded sharply after dropping to near 0.8724. The confident buying action seems a responsive one and the asst will scale higher after overstepping the critical hurdle of 0.8787.

The potential trigger for a decisive break in the cross will be the BOE’s monetary policy. Inflationary pressures surprisingly decline for August after remaining above the double-digit figure despite soaring energy bulls for the UK households. However, the decline in the August inflation rate doesn’t advocate the BOE policymakers to soften their approach. The BOE has to swallow the bitter gulp and announce a rate hike by 50 basis points (bps) despite no support from growth prospects and the labor market.

However, the BOE could not let settle the higher price rise index into economic behavior as earnings data is not supportive in offsetting the forced inflated payouts by the households.

Meanwhile, Eurozone economy is working hard to revive itself from a deepened energy crisis. The German government has decided to bail out the natural gas importer Uniper to ensure sufficient gas supplies in the winter season.

While Russian leader Vladimir Putin has stated that the gas supply will start to Europe if the trading bloc lifts sanctions on Nord Stream pipeline 2. Germany is needed to make sure enough gas inventories to cater to the elevated demand during the winter season. However, the western sanctions on Russia are not expected to get lifted.