EUR/GBP drops from 0.8500 after the annual Eurozone headline HICP decelerated expectedly to 2.5%.
ECB Muller sees further policy easing before year-end.
The BoE is expected to start reducing interest rates in August.
The EUR/GBP pair falls back after failing to recapture the psychological resistance of 1.2500. The cross retreats after the preliminary Eurozone Harmonized Index of Consumer Prices (HICP) report shows that price pressures were mixed in June.
According to the preliminary HICP report, headline HICP decelerated expectedly to 2.5% year-on-year from May’s reading of 2.6%. In the same period, the core HICP, which strips off volatile items, grew steadily by 2.9%. Investors expected the underlying inflation to have declined to 2.8%. These inflation readings don’t provide any cues about where price pressures are heading and won't solve the interest rate outlook puzzle.
Speaking at the European Central Bank (ECB) Forum on Central Banking on Monday, ECB President Christine Lagarde said that the central bank is not in a hurry to cut interest rates further.
Meanwhile, ECB policymaker Madis Muller also advised to be patient with further rate cuts, said in Tuesday’s European trading hours. Muller added, “We can probably cut rates again before year-end.”
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
Hot
No comment on record. Start new comment.