EUR/GBP climbs amid ECB and BoE rate speculations
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European investors eyeing German and Eurozone GDP data as central banks signal caution.
EUR/GBP Rises Ahead of Key GDP Data
The EUR/GBP pair gained ground early Tuesday, moving closer to 0.8350 as traders react to dovish signals from the European Central Bank (ECB). ECB policymaker Pierre Wunsch indicated it’s “premature” to discuss December rate cuts, lending some strength to the Euro (EUR) against the Pound Sterling (GBP). Investors are now looking ahead to Germany and the Eurozone’s preliminary Q3 GDP figures on Wednesday, which could offer more insight into the ECB’s policy direction.
ECB’s Cautious Stance on Rate Cuts
ECB officials remain divided over the extent of future rate cuts, with markets pricing in a 50% chance of a December rate cut. Wunsch’s recent remarks downplayed the urgency of easing, hinting that the bank might avoid a rapid rate reduction. Additionally, ECB Vice President Luis de Guindos expressed cautious optimism about the progress on inflation, though he underscored that the ECB has yet to achieve its goals fully. If Wednesday’s GDP data reveal economic weaknesses, it may amplify pressure on the ECB to consider rate cuts, potentially weighing down the Euro.
BoE Rate Cuts Likely But at a Measured Pace
Meanwhile, the Bank of England (BoE) is expected to cut rates by a quarter point in November to 4.75%, but analysts suggest a slower pace than the ECB’s. A Reuters poll showed a majority of economists anticipating no further cuts in December, suggesting that the GBP may hold a more stable position relative to the EUR.
EUR/GBP Rises Ahead of Key GDP Data
The EUR/GBP pair gained ground early Tuesday, moving closer to 0.8350 as traders react to dovish signals from the European Central Bank (ECB). ECB policymaker Pierre Wunsch indicated it’s “premature” to discuss December rate cuts, lending some strength to the Euro (EUR) against the Pound Sterling (GBP). Investors are now looking ahead to Germany and the Eurozone’s preliminary Q3 GDP figures on Wednesday, which could offer more insight into the ECB’s policy direction.
ECB’s Cautious Stance on Rate Cuts
ECB officials remain divided over the extent of future rate cuts, with markets pricing in a 50% chance of a December rate cut. Wunsch’s recent remarks downplayed the urgency of easing, hinting that the bank might avoid a rapid rate reduction. Additionally, ECB Vice President Luis de Guindos expressed cautious optimism about the progress on inflation, though he underscored that the ECB has yet to achieve its goals fully. If Wednesday’s GDP data reveal economic weaknesses, it may amplify pressure on the ECB to consider rate cuts, potentially weighing down the Euro.
BoE Rate Cuts Likely But at a Measured Pace
Meanwhile, the Bank of England (BoE) is expected to cut rates by a quarter point in November to 4.75%, but analysts suggest a slower pace than the ECB’s. A Reuters poll showed a majority of economists anticipating no further cuts in December, suggesting that the GBP may hold a more stable position relative to the EUR.