EUR/GBP HOLDS POSITION ABOVE 0.8500 AHEAD OF UK, EUROZONE PMI DATA
- EUR/GBP moves sideways as traders adopt caution ahead of PMI figures from both economies.
- ECB officials adopt caution about committing to a rate-cut path due to concerns over inflation rebound.
- UK’s recent inflation and employment data have strengthened the argument for the BoE maintaining the rate at 5.0% in September.
EUR/GBP attempts to retrace its recent losses from the previous session, trading around 0.8520 during Thursday’s Asian hours. The upside of the EUR/GBP cross could be attributed to traders’ expectations of the European Central Bank (ECB) gradually lowering interest rates. However, ECB officials have been cautious about committing to a specific rate-cut schedule due to concerns over inflation rebound.
The likelihood of an ECB rate cut was strengthened after Tuesday’s Harmonized Index of Consumer Prices (HICP) data from the European Monetary Union (EMU) showed no month-on-month change for July, as expected. Additionally, the Core HICP decreased by 0.2%, matching the decline observed in June. Traders are now closely watching the Purchasing Managers Index (PMI) reports for the Eurozone and Germany, due to be released on Thursday.
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