Euro rose in European trade against the sterling for a second session as 10-year German treasury yields rose on prospects of a 0.5% rate hike by the European Central Bank in March.
Conversely, British 10-year treasury yields after data showed UK consumer prices slowed down for the third straight session, reducing pricing for future UK rate hikes.
EUR/GBP rose 0.15% to 0.8896, with a session-high at 0.8872, after closing up 0.7% yesterday, the first profit in eight days after marking two-week lows at 0.8800.
German Yields
German 10-year treasury yields rose 0.7%, extending gains for the third session and hitting six-week highs at 2.485%, bolstering investments in euro.
Such developments came as markets expect the ECB to raise interest rates by 50 basis points in March.
UK Yields
UK 10-year treasury yields fell 0.3% today off five-week highs on profit-taking, pressuring the pound.
Recent UK data showed consumer prices slowed down for the third month in a row, reducing pressure on Bank of England and hurting future pricing for UK rate hikes.
However economists still expect a 0.25% rate hike by the BoE at the next meeting as wages remain strong, but the bank might stop its policy tightening process in May.
Expectations
Experts at CitiBank advise for the purchase of the EUR/GBP pair, targeting levels of 0.92.