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Forex pairs in this Article » EUR/GBP (London) - EUR/GBP has rallied through the morning on another day of Eurozone data releases.

Rate announcements from the European Central Bank and the Bank of England will both almost certainly be non-events, with the former and even greater certainty from the latter. However, the two are coming under pressure from opposite sides.

ECB to hold despite Eurozone slowdown

As data has shown in 2014 so far, the Eurozone continues to stagnate, with little momentum to push it out of its extremely low growth state. Unemployment in the Eurozone remains at 12.1 percent while youth unemployment is in an even worse state. Youth unemployment increased to 23.6 percent in November while in Italy and Spain the rate of jobless young people at 41.6 percent and 57.7 percent respectively. Eurozone inflation stands at 0.8 percent – dangerously close to deflationary territory while the contraction of private credit continues to accelerate, killing off job-creating business growth. But the lack of any major impending catastrophe in the short term will hold Mario Draghi from reducing rates from their already-low levels.

While the ECB will almost certainly hold rates today, the accompanying press conference will probably see Mario Draghi try and jawbone the euro down in an attempt to try and import some price inflation into the Eurozone.

No early rate hike from Threadneedle Street

In contrast, the Bank of England has been beset by chattering about a potential early rate rise – something that has a paper-thin chance of eliciting an accompanying statement to the BoE’s rate announcement today.

BoE governor Mark Carney has been an enthusiastic supporter of forward guidance has been consistent in stating that the BoE will move to hike rates only when the unemployment rate falls below 7 percent and has stressed that the 7 percent rate constitutes a threshold and not a trigger for hikes, suggesting he may let job growth run further before hiking rates.

EUR/GBP rallies

EUR/GBP has rallied, gaining 0.18 percent so far from an opening of GBP0.8257. The pair is currently trading at a session high of GBP0.8270.
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