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Euro, Sterling Rangebound After German IP, UK Housing Beat
German IP and UK housing data beat forecasts, yet ECB's Panetta warned on uncertainty. A tanker was damaged near Oman, reviving oil supply risks. Euro and sterling held tight bands.
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European currencies traded in narrow ranges Wednesday. The euro and sterling held tight bands against the dollar as the session offered no fresh catalyst for direction.
German industrial production rose 0.9% month-on-month in May. The print beat the 0.2% consensus estimate. The data gave the euro a modest lift. The single currency held gains near $1.08 through the European afternoon. Traders said the reading offered a short-term boost to sentiment around the Eurozone manufacturing sector. The broader outlook remains clouded by external risks and uneven momentum across the bloc.
UK Halifax house prices rose 0.2% in June. That topped the 0.1% forecast. Sterling stayed firm against the dollar, holding above $1.27. The print pointed to continued resilience in the housing market. Higher borrowing costs have not yet dented demand, even as affordability constraints persist. Traders said the data reinforced expectations that the Bank of England will keep rates elevated for longer.
ECB board member Fabio Panetta said the Eurozone outlook remains highly uncertain. He warned that upside inflation risks coexist with downside risks to growth. The latest energy shock should not be dismissed as temporary, he added. Panetta's comments reinforced the view that the ECB will not pre-commit to a rate path. Traders said the remarks did little to shift pricing for the next meeting.