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EUR/GBP holds above 0.8450 as expectations rise for BoE rate cut in August

  • EUR/GBP gains ground as the BoE’s dovish pause raised expectations of a rate cut in August.
  • The Euro could struggle due to uncertainties surrounding the outcome of an early election in France.
  • Germany’s IFO business climate index fell to 88.6 in June from 89.3 in May.

EUR/GBP extends its gains for the third consecutive 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, raising expectations of an interest rate cut at the August policy meeting.

The BoE statement and minutes on Thursday indicated that officials are close to making a decision to cut interest rates, said Francesco Pesole, FX strategist at ING. Pesole mentioned that “three rate cuts in 2024 starting in August remain ING’s base case,” which is more moderate compared to the two cuts currently priced in by the market.

Additionally, preliminary UK PMIs released on Friday showed that private sector business activity in June expanded at its slowest pace since last November. This has put further pressure on the GBP, strengthening the EUR/GBP cross.

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

On Monday, Germany’s IFO business climate index fell to 88.6 in June from 89.3 in May, falling below the market expectation of 89.7. The current evaluation index was unchanged at 88.3, ​​while the expectations index fell to 89.0 from 90.4. This weaker data from Germany could put pressure on the Euro, further limiting the rise of the EUR/GBP cross.

EUR/GBP

Summary
Latest price today 0.8461
Today’s daily change 0.0005
Daily change % today 0.06
Today’s daily opening 0.8456
Trends
SMA20 Journal 0.8476
SMA50 Daily 0.8531
SMA100 Journal 0.8542
SMA200 Journal 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

Source: Fx Street

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