EUR/GBP is on the upswing for the second day in a row, currently trading at 0.8430 during the European session. The European Central Bank (ECB) is hinting at a potential rate cut in September, which could impact the Euro’s strength in the market.
ECB’s François Villeroy de Galhau has advocated for a rate cut at the next meeting, citing “good reasons” for the central bank to take action. This move could be seen as a step towards normalizing policy and boosting inflation back to the 2% target by 2025.
In the UK, BRC Like-for-Like Retail Sales saw a 0.8% year-on-year increase in August, the fastest growth in five months. This positive data, along with the steady S&P Global UK Manufacturing PMI at 52.5 for August, indicates a stable economic outlook.
While the EUR/GBP cross may face challenges due to the potential ECB rate cut, the Bank of England (BoE) is not expected to make any changes in the September meeting. However, there is a high probability of a 25 basis points rate cut in the November meeting.
Traders are closely watching BoE Deputy Governor Sarah Breeden’s role at a conference hosted by the ECB and the European Banking Authority, which could provide further insights into future monetary policies.
Understanding the ECB’s decisions and their impact on the Eurozone and the UK is crucial for investors and individuals looking to make informed financial decisions. Stay tuned for more updates on the evolving financial landscape.