EUR/GBP moves below 0.8550 after disappointing German data, focus on Lagarde’s speech

• EUR/GBP is trading lower around 0.8550 on weak data from the Eurozone and Germany.
• Christine Lagarde, President of the ECB, will deliver a speech during a press conference on Monday.
• Traders appear cautious on hawkish expectations from the ECB amid a bleak economic scenario in the UK.

The EUR/GBP pair is trading lower around 0.8550 during the European session on Monday, struggling to hold its ground following disappointing data releases from the Eurozone and Germany. Germany’s trade balance for July narrowed to 15.9 billion euros compared to 18.7 billion euros expected the previous month. Along with this, Eurozone Sentix Investor Confidence for September showed a decline to -21.5 from -18.9.

Elsewhere, the pair is facing downward pressure as investors are cautious, fearing that further monetary tightening by the European Central Bank (ECB) could push the Eurozone economy into recession.

Traders are waiting for ECB President Christine Lagarde’s speech during the press conference scheduled for late in the day. During this conference, Lagarde could present the ECB’s assessment of the current and future situation of the Eurozone economy.

ECB Governing Council member Pierre Wunsch stressed prevailing inflation as a factor supporting the need for further tightening of monetary policy. During a radio interview broadcast by Bloomberg on Saturday, Pierre said: “I am inclined to think that we may need to do more.”

Conversely, EUR/GBP traders appear to be taking a cautious stance, given the difficult economic conditions prevailing in the United Kingdom (UK). The hawkish expectations raise concerns about the possible negative impact on the UK economy of a further interest rate hike during the September Bank of England (BoE) meeting.