EUR/GBP sticks to gains after Eurozone PMIs, remains below two-month high set on Thursday

pean session. Spot prices currently trade around the 0.8680 area, up for the third straight day and fifth in the previous six, albeit lack follow-through and remain below a two-month peak touched on Thursday.

The British Pound's relative underperformance could be attributed to the Bank of England's surprise pause on Thursday, which, in turn, is seen acting as a tailwind for the EUR/GBP cross. In fact, the UK central bank ended a run of 14 straight interest rate hikes in the wake of the recent deceleration of inflation, signs that the UK labour market is cooling and reviving recession fears.

Adding to this, softer-than-expected UK macro data released today undermines the Sterling and lends additional support to the EUR/GBP cross. The UK Office for National Statistics reported that the headline Retail Sales rebounded and increased by 0.4% in August following the previous month's sharp 1.1% fall. The rise, however, was slightly below the 0.5 % growth anticipated.

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