- EUR/GBP progress as the euro reinforces, supported by stronger eurozone inflation data.
- The impact on the perspective of ECB policy is likely to be limited despite the reversal surprise.
- The Bank of England is widely expected to cut interest rates by 25 basic points on Thursday.
EUR/GBP Continue to climb for fourth consecutive sessions, trading around 0.8530 during Europe's early hours on Monday. Currency Cross gets while the Euro (EUR) strengthens the back of the stable Eurozone The inflation data, which was released Friday.
According to Eurostat, the main aggregate index of consumer prices (HICP)-which excludes volatile ingredients such as food, energy, alcohol, and tobacco-by 2.7% year-year in April, which exceeds the same 2.5% assessment in the market and reading 2.4% of March. HICP's headline also beat expectations, rising by 2.2% annually compared to the expected 2.1%. On a monthly basis, the HICP's core and headline rose 1.0% and 0.6%, respectively.
Despite the warmer-than-anticipated inflation data, the impact on the European Central Bank's (ECB) insight on the policy policy is expected to remain muted. Policy manufacturers are increasingly focused on the broader economic slowdown, especially amid the added pressure of the new tariffs announced by US President Donald Trump. Most Ecb Officials remain confident that inflation will be easy at 2% target this year, with markets continuously price at a 25 basic point rate cut at the June meeting.
At the same time, the British pound (GBP) faced pressure due to growing expectations that Bank of England The (BOE) will lower interest rates by 25 basis points to 4.25% during its policy meeting on Thursday. Dovish sentiment arises from many factors: prolonged uncertainty tied to US tariffs, a weakening of the UK labor market, which is partly due to increasing employer's social security contributions, and softer-than-expected inflation numbers for March.
