The EUR/GBP pair has bounced back from its intraday losses, currently trading around 0.8430 in early European trading on Friday. The recovery comes after comments from European Central Bank (ECB) policymakers and expectations of additional rate cuts by the Bank of England (BoE).
Following the ECB’s interest rate decision on Thursday, which included a larger-than-expected 60 basis points rate cut, ECB Governing Council member Bostjan Vasle emphasized that the central bank is not tied to a predetermined rate path. Additionally, Bundesbank President Joachim Nagel mentioned that core inflation is on the right track and could reach the target by the end of next year.
Traders are now looking towards the BoE for further easing measures, especially after recent data showed a slowdown in UK wage growth and flat GDP figures for July. These economic signals have heightened expectations of rate cuts by the BoE in the near future.
On the economic front, Friday’s Eurozone Industrial Production data is expected to show a decrease of 0.3% month-on-month in July, with an annual decline of 2.7%. In the UK, Consumer Inflation Expectations will be closely monitored for further insights into the economic landscape.
Overall, the market sentiment is influenced by central bank policies and economic data, with potential implications for currency pairs like EUR/GBP. Stay informed and be prepared for potential market movements based on these developments.