GBP/USD, EUR/USD braced for European session dominated by CPI releases

The European session agenda is dominated by inflation data, placing GBP/USD and EUR/USD at the centre of intraday volatility. The headline event is the UK CPI report, a fresh reading that will directly shape expectations for the Bank of England's policy stance over the final months of the year. With market pricing for further BOE easing still fluid, an upside surprise would likely lift short-dated gilt yields and support sterling, while a downside miss could accelerate cut expectations and weigh on GBP/USD and lift EUR/GBP. The Eurozone CPI report is also scheduled, but as the final estimate for July it rarely deviates materially from the flash reading and therefore tends to have limited market impact, leaving EUR/USD more responsive to cross-flows and dollar direction. Traders should expect the sharpest moves in sterling crosses in the minutes following the UK release, with GBP/JPY and EUR/GBP typically amplifying the reaction. Liquidity conditions ahead of the print may exaggerate initial spikes before positioning settles.