EUR/GBP holds ground after the release of positive German figures on Monday.
German IFO – Business Climate came in at 86.6 for August, exceeding the expected reading of 86.5.
BoE Governor Bailey suggested the possibility of accelerating rate cuts during his speech at the Jackson Hole symposium.
EUR/GBP attempts to halt its three-day losing streak following key economic data from Germany released on Monday, trading around 0.8470 during Monday’s European session.
The German IFO Business Climate index for August came in at 86.6, slightly above the market expectations of 86.5. However, this was a decrease from the previous month's reading of 87.0. Meanwhile, the IFO Current Assessment matched expectations with a reading of 86.5, down from 87.1 in the previous month.
On Friday, European Central Bank (ECB) Governing Council member Olli Rehn suggested that the recent drop in inflation, combined with economic weakness in the Eurozone, strengthens the argument for lowering borrowing costs next month, Bloomberg reports.
The sluggish growth outlook in Europe, especially in the manufacturing sector, further reinforces the case for a rate cut in September. Additionally, markets are assessing how the increasing expectations of Federal Reserve rate cuts might impact borrowing costs in Europe.
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