EUR/GBP advances to 0.8630 as BoE Ramsden’s soft inflation outlook revamp rate cut hopes

Source Fxstreet
Apr 22, 2024 11:24
  • EUR/GBP moves higher as soft inflation outlook uplifts BoE early rate cut prospects.
  • BoE Ramsden sees inflation remaining lower than BoE’s latest forecasts.
  • ECB Villeroy is comfortable with the central bank pivoting to rate cuts from June.

The EUR/GBP pair rises to 0.8630 in Monday’s European session. The cross moves higher as investors hope that Bank of England (BoE) Deputy Governor Dave Ramsden will join policymaker Swati Dhingra and vote for a rate cut in the upcoming monetary policy meeting on May 9.

On Friday, Dave Ramsden commented that risks to United Kingdom inflation remaining persistent have receded and he expects price pressures could remain below BoE’s latest inflation forecasts. Ramsden added that he sees inflation remaining around BoE’s 2% target in the next three years and expects it won’t rise again as expected for later this year.

Soft inflation guidance from BoE Ramsden has boosted expectations for early rate cuts. Traders have priced out bets leaned towards the BoE pivoting to rate cuts in November and are expecting them now from August. The impact is visible in the Pound Sterling’s performance against the Euro.

Going forward, investors will focus on the UK S&P Global/CIPS preliminary PMI data for April, which will be published on Tuesday. The Services PMI is estimated to have declined slightly to 53.0 from 53.1. The Manufacturing PMI is expected to expand steadily by 50.3.

Meanwhile, the Euro will remain on the tenterhooks as investors see a move by the European Central Bank (ECB) to rate cuts as imminent. The ECB is projected to reduce interest rates three times this year as Eurozone inflation has softened significantly and the economic outlook is weak.

The expectations for ECB reducing rate cuts from June remains firm as French central bank head and ECB policymaker Villeroy de Galhau said on Thursday that they could cut rates in the next meeting, barring a major surprise. Villeroy emphasized returning to structural transformation as inflation is receding.

EUR/GBP

Overview
Today last price 0.8642
Today Daily Change 0.00288
Today Daily Change % 0.33
Today daily open 0.8614
 
Trends
Daily SMA20 0.8564
Daily SMA50 0.8554
Daily SMA100 0.8575
Daily SMA200 0.8607
 
Levels
Previous Daily High 0.8616
Previous Daily Low 0.8555
Previous Weekly High 0.8616
Previous Weekly Low 0.8521
Previous Monthly High 0.8602
Previous Monthly Low 0.8504
Daily Fibonacci 38.2% 0.8592
Daily Fibonacci 61.8% 0.8578
Daily Pivot Point S1 0.8574
Daily Pivot Point S2 0.8534
Daily Pivot Point S3 0.8513
Daily Pivot Point R1 0.8634
Daily Pivot Point R2 0.8655
Daily Pivot Point R3 0.8695

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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