EUR/GBP flat lines above mid-0.8300s, remains confined in a multi-day-old range

Source Fxstreet
  • EUR/GBP struggles for a firm near-term direction as traders keenly await the ECB on Thursday. 
  • The ECB is expected to lower interest rates again amid easing inflation and economic slowdown.
  • Bets for an aggressive BoE policy easing undermine the GBP and act as a headwind for the cross. 

The EUR/GBP cross extends its sideways consolidative price move through the first half of the European session on Monday and remains confined in a familiar range held over the past week or so. Spot prices currently trade around the 0.8365 region, nearly unchanged for the day as traders opt to wait on the sidelines ahead of the key central bank event risk later this week. 

The European Central Bank (ECB) is scheduled to announce its policy decision on Thursday and is expected to cut interest rates again for the third time this easing cycle amid mounting concerns over sluggish growth. Furthermore, inflation in the Eurozone fell below the ECB's 2% target for the first time since 2021 and backs the case for further policy easing. This, in turn, undermines the shared currency and turns out to be a key factor acting as a headwind for the EUR/GBP cross. 

Meanwhile, the Bank of England (BoE) Governor Andrew Bailey recently hinted that the central bank could cut interest rates more aggressively if there's further good news on inflation. The comments fueled speculation that the BoE might be headed towards speeding up its rate-cutting cycle and hold back traders from placing bullish bets around the British Pound (GBP). This, to a larger extent, offsets the negative factor and offers some support to the EUR/GBP cross.

The aforementioned mixed fundamental backdrop supports prospects for an extension of the subdued range price action in the absence of any relevant market-moving economic releases, either from the Eurozone or the UK. Hence, it will be prudent to wait for a sustained move in either direction before positioning for a firm near-term trajectory.

Economic Indicator

ECB Rate On Deposit Facility

One of the European Central Bank's three key interest rates, the rate on the deposit facility, is the rate at which banks earn interest when they deposit funds with the ECB. It is announced by the European Central Bank at each of its eight scheduled annual meetings.

Read more.

Next release: Thu Oct 17, 2024 12:15

Frequency: Irregular

Consensus: 3.25%

Previous: 3.5%

Source: European Central Bank

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold posts first weekly gain in three weeks — can $4,200 hold through CPI?Spot gold closed at $4,194.645, up 1.47% — its first weekly gain in three weeks — and COMEX futures settled back above $4,200 at $4,220.30. Here are the drivers, the levels and the scenarios into Wednesday's CPI.
Author  Irene Q.
17 hours ago
Spot gold closed at $4,194.645, up 1.47% — its first weekly gain in three weeks — and COMEX futures settled back above $4,200 at $4,220.30. Here are the drivers, the levels and the scenarios into Wednesday's CPI.
placeholder
US September CPI preview: inflation set to hit 3.7% — will the Fed hike in December?US September CPI lands Wednesday with headline inflation seen at 3.7% y/y and core at 0.2% m/m. December hike odds sit near 70% — here are the scenarios, the calendar and the key levels.
Author  Irene Q.
19 hours ago
US September CPI lands Wednesday with headline inflation seen at 3.7% y/y and core at 0.2% m/m. December hike odds sit near 70% — here are the scenarios, the calendar and the key levels.
placeholder
Gold Price Forecast: Gold Rebounds Above $4,200, Can Falling Oil Prices Drive Another Rally?As of Friday (October 9), gold prices (XAUUSD) rebounded noticeably after consecutive declines. During today's Asian session, gold prices briefly rebounded above $4,200, reaching an intra
Author  TradingKey
Yesterday 09: 23
As of Friday (October 9), gold prices (XAUUSD) rebounded noticeably after consecutive declines. During today's Asian session, gold prices briefly rebounded above $4,200, reaching an intra
placeholder
Hurricane Isaias has shut in a quarter of Gulf oil output — can WTI clear $92 before Thursday's EIA report?WTI trades at $90.80 after rebounding roughly 3% from Wednesday's $87.96 low as Hurricane Isaias — the Atlantic season's first — forces producers to shut in about 25% of US Gulf of Mexico output. Brent holds at $103.41. The first official read on the disruption arrives with the EIA weekly petroleum report on Thursday 15 October — here are the key levels and both scenarios.
Author  Irene Q.
Yesterday 06: 38
WTI trades at $90.80 after rebounding roughly 3% from Wednesday's $87.96 low as Hurricane Isaias — the Atlantic season's first — forces producers to shut in about 25% of US Gulf of Mexico output. Brent holds at $103.41. The first official read on the disruption arrives with the EIA weekly petroleum report on Thursday 15 October — here are the key levels and both scenarios.
placeholder
【Daily Brief】Gold rebounds 1% off a two-month low, Nasdaq drops 1.25% and yields ease — the storm premium keeps WTI near $91Gold trades at $4,174 after rebounding from Wednesday's $4,090 two-month low, the Nasdaq fell 1.25% while the Dow edged higher, and the 10-year Treasury eased to 5.23% from the week's highs. Hurricane Isaias keeps about 25% of Gulf output shut in with WTI near $91, and bitcoin holds below $82,000. The next scheduled tests are the EIA report on 15 October and the FOMC on 27-28 October.
Author  Irene Q.
Yesterday 06: 28
Gold trades at $4,174 after rebounding from Wednesday's $4,090 two-month low, the Nasdaq fell 1.25% while the Dow edged higher, and the 10-year Treasury eased to 5.23% from the week's highs. Hurricane Isaias keeps about 25% of Gulf output shut in with WTI near $91, and bitcoin holds below $82,000. The next scheduled tests are the EIA report on 15 October and the FOMC on 27-28 October.
Related Instrument
goTop
quote