EUR/GBP remains firm above 0.8350 following German inflation, UK GDP data

• EUR/GBP gains traction to near 0.8380 in Friday's early Asian session, up 0.11% on the day. 
• The German HICP inflation remained steady at 1.8% YoY in September, as expected. 
• The UK GDP expanded 0.2% MoM in August, matched estimates. 

The EUR/GBP cross trades on a stronger note around 0.8380 on Friday during the early European trading hours. The Euro (EUR) remains firm after the release of German inflation data and UK growth numbers. Traders will shift their attention to the UK employment data next week. 

Data released by Destatis on Friday showed that the German Harmonized Index of Consumer Prices (HICP) rose 1.8% YoY in September, compared to the previous reading and the expectations of 1.8%. The German inflation data continues to support the Euro, while investors were digesting the ECB's cautious tone on economic growth. 

The meeting account published on Thursday showed that the ECB remains confident that inflation is on track to hit the 2% target. The ECB policymakers see the cut rates by 25 basis points (bps) in September as appropriate due to disinflation and a fragile recovery. 

The ECB signaled that any further policy easing would be gradual and data-dependent. The ECB is anticipated to cut the deposit rate to 3.5% next week. More than 90% of economists polled by Reuters expect a reduction next week, with a similar majority betting on a follow-up move in December.

On the UK's front, the Office for National Statistics (ONS) showed on Friday that the UK economy grew by 0.2% over the month in August. The reading matched the market consensus of 0.2% growth in the reported period.

Meanwhile, further delay on rate cuts by the Bank of England (BoE) might cap the downside for the Pound Sterling (GBP) in the near term. The BoE chief economist Huw Pill warned against cutting the base rate "too far or too fast" last week. Investors expect the UK central bank to cut the rate by a total of 0.5% to 4.5% in two of its last three meetings before the end of the year.