EUR/GBP stays above 0.8450 due to heightened expectations of BoE’s rate cut in August

Source Fxstreet
Jun 24, 2024 08:41
  • EUR/GBP gains ground as the BoE dovish pause increased expectations for a rate cut in August.
  • The Euro could struggle due to uncertainties surrounding the outcome of a snap election in France.
  • The headline German IFO Business Climate Index fell to 88.6 in June from 89.3 in May.

EUR/GBP extends its gains for the third successive session, trading around 0.8460 during the European session on Monday. The British Pound (GBP) remains under pressure following the Bank of England's (BoE) dovish pause last week, which increased expectations for an interest rate cut at the August monetary policy meeting.

Thursday’s BoE statement and minutes indicated that officials are nearing a decision to cut interest rates, as noted by ING’s FX Strategist Francesco Pesole. Pesole mentioned that "three rate cuts in 2024 starting from August remain ING’s base case," which is more dovish compared to the two cuts currently priced in by the market.

Additionally, the flash UK PMIs released on Friday showed that private sector business activity in June expanded at its slowest rate since last November. This has exerted further pressure on the Pound Sterling, bolstering the EUR/GBP cross.

The EUR/GBP cross may limit its upside as the Euro could struggle due to uncertainties surrounding the outcome of a snap election in France, fueling concerns that a new government might worsen the fiscal situation in the Eurozone's second-largest economy.

On Monday, the headline German IFO Business Climate Index fell to 88.6 in June from 89.3 in May, coming in below the market expectation of 89.7. The Current Assessment Index remained unchanged at 88.3, while the Expectations Index dropped to 89.0 from 90.4. This weaker German data could put pressure on the Euro, further limiting the upside of the EUR/GBP cross.

EUR/GBP

Overview
Today last price 0.8461
Today Daily Change 0.0005
Today Daily Change % 0.06
Today daily open 0.8456
 
Trends
Daily SMA20 0.8476
Daily SMA50 0.8531
Daily SMA100 0.8542
Daily SMA200 0.8593
 
Levels
Previous Daily High 0.8465
Previous Daily Low 0.8443
Previous Weekly High 0.8465
Previous Weekly Low 0.8429
Previous Monthly High 0.8621
Previous Monthly Low 0.8484
Daily Fibonacci 38.2% 0.8457
Daily Fibonacci 61.8% 0.8451
Daily Pivot Point S1 0.8444
Daily Pivot Point S2 0.8432
Daily Pivot Point S3 0.8422
Daily Pivot Point R1 0.8467
Daily Pivot Point R2 0.8477
Daily Pivot Point R3 0.8489

 

 

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