Euro, pound, franc, dollar
A picture illustration of U.S. dollar, Swiss Franc, British pound and Euro bank notes, taken in Warsaw January 26, 2011.Reuters

The British pound strengthened to new multi-year highs versus euro and Swiss franc, while it dropped to a 20-day low against the Australian dollar, ahead of the release of the Bank of England (BoE) minutes on 23 July.

Pound has moved little against the yen and the dollar.

Sterling's mixed performance was amid weak trade data in Switzerland and upbeat CPI inflation numbers in Australia. There have been no major releases from the Eurozone this week while the minor ones have failed to provide any support to the single currency.

GBP/AUD fell to 1.8080, its lowest since 2 July, from Tuesday's close of 1.8164 and EUR/GBP dropped from 0.7891 to 0.7885, its lowest since August 2012. GBP/CHF has rallied to 1.5409, its highest since August 2012, from the previous close of 1.5399.

GBP/USD strengthened to 1.7075 from 1.7064 on the day, but the move was only a reversal of the previous day's move. GBP/JPY was unchanged near 173.01.

The CPI inflation quickened to 3.0% year-on-year in the second quarter from 2.9% in Q1. Reserve Bank of Australia's trimmed mean measure of the CPI accelerated to 2.9% from a year earlier from 2.6%, topping market consensus of 2.8%.

Data on Tuesday showed Switzerland's trade surplus fell to $1.38bn in June from $2.85bn in the previous month while analysts had been expecting only a marginal decrease to $2.82bn. The data had weakened the Swiss franc across the board, and it continued to weigh on the currency the next day.

Upbeat economic data from the UK over the past months have increased bets that the Bank of England will get into the rate hiking cycle ahead of its big counterparts like the Fed, while the European Central Bank rates look to have more room on the downside.

The MPC decision to keep the Bank Rate steady at 0.5% on 10 July is forecast to have been unanimous, so if the minutes at 8:30 GMT on Wednesday show any vote split, the pound will react sharply.

The market will then wait for remarks by the BoE governor Mark Carney, who is scheduled to address the Commonwealth Games Trade and Investment Conference at Glasgow.

EUR/GBP Technical Outlook

The cross has not yet finished its third wave in the downward channel since early 2009, a big picture analysis shows. The move has broken below the 50% Fibonacci retracement of the 2007-2009 rally near 0.8180 and has dropped more than 3.6% since then.

The next important level is the 61.8% mark near 0.7800 ahead of the bigger support line of 0.7500 which makes the channel support as on date.

On the higher side, the 50% mark has now turned the next important level though 0.8000 will offer some resistance ahead of that.

EUR/GBP Weekly
EUR/GBP WeeklyIB Times UK/FXStreet