EUR/GBP Low to about 0.8700, the BOE policy takes the center of the stage

• The EUR/GBP operates containing around 0.8700, while the attention focuses on the monetary policy of the BOE on Thursday.
• The BOE is expected to reduce interest rates at 25 basic points to 4%.
• Investor confidence in the Eurozone has decreased significantly in August.

The EUR/GBP pair lowers slightly close to the round level of 0.8700 during Tuesday’s Asian trading session. The Par faces a slight sales pressure, while investors deviate their attention to the Monetary Policy announcement of the Bank of England (BOE) on Thursday.

Traders have discounted a reduction of 25 basic points (PBS) in the interest rate by the BOE, a movement that will carry the indebtedness rates to 4%. At the last policy meeting, the BOE held the stable interest rates and guided an “grad and careful” monetary expansion approach.

Investors will pay special attention to the BOE monetary policy guide for the rest of the year at a time when labor demand in the United Kingdom (UK) faces the pressure of an increase in employers’ contribution to social security schemes and inflation pressures remain high.

Etoro analysts have warned that the British currency could fall down since the BOE faces a “complicated combination of low growth combined with high inflation, or stagflation.” Contrary to market expectations, analysts have affirmed that the BOE should maintain “interest rates waiting” until “underlying inflation decreases.”

Meanwhile, the Euro (EUR) faces a slight sales pressure since the Firix investor index of the Eurozone collapsed to a minimum of three months of -3.7 in August, from the reading of 4.5 of the previous month, against the expectations of the market of an additional improvement to a reading of 8.0.