EUR/GBP drifts to 0.8670 lows after soft Eurozone inflation data

• The Euro trims losses following rejection at two-week highs near 0.8700.
• UK inflation remained steady in August, but the core CPI and services inflation eased.
• In the Eurozone, consumer inflation cooled in August, but the Core CPI remained steady.

The Euro has given away some of Tuesday's gains on Wednesday. The pair pulled back from two-week highs a few pips shy of 0.8700, although it remains steady above the 0.8670 level so far.

In the UK, National Statistics data revealed that consumer inflation remained fairly steady above the bank's 2% target rate in August. The CPI kept growing at a 0.4% monthly rate and 3.8%, unchanged from July, but still below the 3.9% and 0.5% readings anticipated by the market's consensus.

The core CPI, on the other hand, eased to 3.6% from 3.8% in July, in line with market expectations and services inflation cooled to a 4.7% year-on-year growth from the previous month's 5% pace. These figures have watered down the impact of the stronger headline figures.

The Euro, however, has failed to draw any significant support as Eurozone inflation figures have shown a similar trend. The headline HICP eased to a 2.0% year-on-year growth and a 01% monthly reading against expectations of steady inflationary pressures, at 2.1% and 0.2% respectively. Core inflation, in this case, has remained unchanged from the previous month growing at a 0.3% rate from July and 2.3% from August last year.

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