EUR/GBP keeps wavering below 0.8750 with Eurozone inflation data on tap

• The Euro has been trading choppy between 0.8715 and 0.8750 for the last two weeks.
• The Eurozone HICP is expected to show that consumer inflation accelerated in September.
• On Tuesday, upbeat UK GDP data provided an additional impulse to the GBP

The Euro continues to trade in a choppy and volatile manner within a tight range, with 0.8750 capping upside attempts and bears contained above 0.8715 so far, as markets await the release of Eurozone inflation data for further clues about the ECB's rate path.

Eurozone's preliminary Harmonized Index of Consumer Prices (HICP) is expected to show an acceleration to a 2.2% year-on-year rate, from the 2.0% reading seen in August. The core inflation, however, is expected to grow at a 2.3% pace, unchanged from the previous month.

On Tuesday, German inflation numbers surprised with a larger-than-expected pick up in September, and ECB President Christine Lagarde affirmed that the bank is ready to act if inflation risks shift, as investors pare back bets of further rate cuts.

The Euro, however, remained on its back foot on Tuesday, weighed by a firmer British Pound following a stronger-than-expected UK economic growth in the second quarter.

Data released by National Statistics on Tuesday revealed that UK Gross Domestic Product (GDP) grew at a 0.3% pace in Q2, unchanged from the previous quarter, but at a 1.4% yearly rate, up from 1.2% in the first three months of the year and beating expectations of a 1.2% reading. The Pound appreciated across the board following the data release.