EUR/GBP defends 0.8420 ahead of critical EU/UK data

• EUR/GBP trades marginally higher on Friday in the Asian trading hours.    
• UK Retail Sales, Eurozone/ German PMIs remain the talk of the session.
• UK Prime Minister Johnson cools down to compromise Brexit-led NI protocol terms.

EUR/GBP extends the previous session’s gains on Friday. The cross-currency pair managed to bounce higher, after testing the yearly low at 0.8422 in the US session. At the time of writing, EUR/GBP is trading at 0.8431, up 0.07% for the day.

The shared currency gained some momentum against the British pound for the past two-sessions on the expectations that the European Central Bank (ECB) will turn less dovish in the near future. The ECB Policymaker Pierre Wunsch favored a gradual exit from the ECB’s expansionary monetary policy as per Reuters. The Market anticipates that ECB could push forward interest rate hikes in 2022 against its early estimates of 2024. On the economic side, the Eurozone Consumer Confidence fell -4.8 in October from -4.00 in the previous month.

On the other hand, the sterling seems to enjoy the hawkish Bank of England (BOE) and the Brexit-lead optimism. BOE Chief economist Huw Pill said that UK inflation is likely to hit 5% in early 2022.

In addition to that, the UK Prime Minister Boris Johnson expressed his readiness to compromise terms relating to the Northern Ireland (NI) protocol to overcome the deadlock in Brexit talks. The gains were limited, following the dismal UK’s GfK Consumer Confidence data, which came at -17 in October as compared to -13 in the previous month.

It is worth mentioning that, S&P 500 Futures is  trading at 4,537, down 0.09% for the day.

As for now, traders are waiting for the UK’s Retail Sales, German/ EU PMIs data to gauge market sentiment data.

EUR/GBP additional levels