- IMF’s Lagarde warns over prolonged period of low growth in the euro area.
- UK’s Johnson wins the first ballot.
After closing the last two days in the negative territory, the EUR/GBP pair extended its slide on Thursday and dropped below the 0.89 mark. As of writing, the pair was down 0.12% on a daily basis as 0.8884.
Earlier today, the data published by Destatis showed that inflation in Germany as measured by the Consumer Price Index (CPI) stayed unchanged at 0.2% and 1.4% on a monthly and yearly basis, respectively, to match analysts estimates. Other data today revealed that industrial production in the euro area contracted by 0.5% on a monthly basis in April.
While speaking to reporters at the euro zone finance ministers in Luxembourg, International Monetary Fund (IMF) Chief Christine Lagarde argued that there was a risk of euro zone slipping into a prolonged period of low growth and low inflation.
On the other hand, in the absence of significant macroeconomic data releases from the UK, headlines helped the British pound gather strength on Thursday. Prime minister candidate Boris Johnson today won the first ballot with 114 votes and Jeremy Hunt came in second with 43 votes. Although this development doesn’t necessarily mean that it will be easier for the UK to reach a desired Brexit outcome with Johnson as the next PM, the fact that he is leading the race by a wide margin hinted at unity in the Conservative Party to ease political concerns a little.
Technical levels to consider
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