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EUR/GBP sees choppy trading ahead of UK manufacturing numbers

FXstreet.com (London) - Sterling has seen choppy trading against the euro in advance of UK manufacturing numbers.

The euro has come under pressure following yesterday’s weaker-than-expected Eurozone inflation numbers fuelling expectations that the ECB would move to further cut interest rates at its December meeting. Yesterday’s inflation numbers came in at 0.7 percent for the year-to-September.

EUR/GBP opened at GBP0.8469 but has swung between GBP0.8451 and GBP0.8470.

It is expected that we will see a drop in Markit UK manufacturing numbers when they are released, down from 56.7 in September.

Sterling has seen steady gains throughout the third quarter of 2013, but may be set for headwinds into the fourth quarter, especially as the effects of declining real wages and increasing fuel prices weigh on consumer confidence.

Flash: Downside inflation makes it probable that the ECB acts in December - BTMU

Derek Halpenny, European Head of Global Markets Research at the Bank of Tokyo Mitsubishi UFJ suggests that since ECB President Draghi has repeatedly emphasized that the bias of the ECB is to ease, this surprise downside inflation print makes it probable that the ECB acts in December.
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AUD/USD capped by 0.9490

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