During Monday’s Asian session, EUR/GBP continued its upward trajectory for the second consecutive day, reaching approximately 0.8550. The release of Consumer Inflation Expectations by the Bank of England (BoE) on Friday indicated a 3.0% increase, slightly lower than the previous uptick of 3.3%.
Market speculation has heightened regarding a potential Bank of England (BoE) rate cut in June following the softer inflation data. Such an action could potentially weaken the Pound Sterling (GBP), thereby offering support to the EUR/GBP cross.
In addition to this, Monday witnessed a notable surge in the Rightmove House Price Index (MoM) for March, which rose by 1.5%, surpassing the previous increase of 0.9%. The annual report also displayed a substantial rise of 0.8% compared to the previous 0.1%.
Meanwhile, the European Central Bank (ECB) maintained its record-high borrowing costs during its March meeting, albeit hinting at discussions surrounding a potential rate cut. This dovish stance from ECB policymakers poses challenges for the Euro. François Villeroy de Galhau, an ECB policymaker, suggested the possibility of a rate cut in the upcoming spring.
Echoing similar sentiments, ECB policymaker Pablo Hernandez de Cos mentioned on Sunday that the central bank opted to retain record-high borrowing costs this month. However, he indicated a likelihood of interest rate cuts commencing in June following a decline in Eurozone inflation.
Moving forward, market focus remains on the Eurozone Harmonized Index of Consumer Prices (HICP) and Trade Balance for further insights. Looking ahead to Tuesday, traders will closely monitor various market indicators from the United Kingdom (UK), including the Consumer Price Index, Producer Price Index, and Retail Price Index.
