Euro extends reversal against British Pound amid grim Eurozone Industrial Production

Source Fxstreet
  • EUR/GBP retreats to levels below 0.8460 from session highs near 0.8480.
  • The Euro pulls back from session highs as Eurozone Industrial Production disappoints, while UK GDP beats expectations.
  • Previously, the pair had drawn some support from the Pound's weakness following dovish comments from BoE's Pill.

The Euro (EUR) retreats further from session highs against the British Pound (GBP) on Thursday, as Eurozone Industrial Production misses expectations, while UK monthly Dros Domestic Product (GDP) figures posted a positive surprise. The EUR/GBP pair has retreated below 0.8460 from session highs near 0.8480 during the early Asian trade and is practically flat on the daily chart.

Data released by Eurostat earlier on Thursday revealed that Industrial Production contracted 0.5% in August, marking the third consecutive monthly decline, against market expectations of a flat performance. Apart from that, July's data has been revised to a 0.3% decline from previous estimates of a 0.1% contraction.

These figures add negative pressure on the Euro, which was already on the defensive, following a positive surprise in the UK's Gross Domestic Product (GDP) figures.

UK economy grew 0.1% in August, according to monthly GDP figures released by National Statistics earlier on Thursday, beating expectations of a 0.1% contraction and following a 0.4% growth in the previous month. August's increase has been largely due to better-than-expected UK Industrial Production data, which has offset the poor performance of the construction and services sectors.

BoE’s Pill tempers rate hike expectations, limiting GBP upside

Before that, dovish comments by the Bank of England’s (BoE) chief economist, Huw Pill, downplaying market speculation about an upcoming monetary tightening cycle sent the Pound tumbling against its main peers on Wednesday and early Thursday's trading. The EUR/GBP bounced from 16-month lows at 0.8426 to session highs near 0.8480.

Pill warned on Wednesday that a potential monetary tightening move “should not give the impression that a hike now would be the start of a series of increases,” dampening hopes of a sustained tightening cycle and capping immediate GBP support.

This framing suggests any future move would be more of a fine-tuning than the start of a new hiking phase, which reduces the appeal of GBP versus the Euro and Dollar on a relative policy divergence basis. For FX markets, the speech leans toward a one-and-done narrative, encouraging traders to fade aggressive GBP strength and focus instead on data-dependent, range-bound trading strategies.

Economic Indicator

Industrial Production s.a. (MoM)

The Industrial Production index, released by Eurostat on a monthly basis, measures changes in the price-adjusted output of industry. It is a widely-followed indicator to gauge the strength in the Eurozone’s manufacturing sector. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.

Read more.

Last release: Thu Oct 15, 2026 09:00

Frequency: Monthly

Actual: -0.5%

Consensus: 0%

Previous: -0.1%

Source: Eurostat

Economic Indicator

Industrial Production w.d.a. (YoY)

The Industrial Production is released by the Eurostat. It shows the volume of production of Industries such as factories and manufacturing. Up trend is regarded as inflationary which may anticipate interest rates to rise. Usually, if high industrial production growth comes out, this may generate a positive sentiment (or bullish) for the EUR, while low industrial production is seen as a negative sentiment (or bearish).

Read more.

Last release: Thu Oct 15, 2026 09:00

Frequency: Monthly

Actual: -1.1%

Consensus: -0.1%

Previous: 0%

Source: Eurostat

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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