EUR/GBP Falls Slightly Below 0.8500 Ahead Of ECB President Lagarde’s Speech

EUR/GBP fell to around 0.8470 in early European trading on Wednesday. Softening inflation in the eurozone in June has fueled hopes of another rate cut by the European Central Bank (ECB) this year, which has put some selling pressure on the euro (EUR).

The upcoming UK general election is likely to limit the volatility of the pound before the vote on Thursday, and the result of the vote on Friday may trigger some volatility. In addition, growing bets that the Bank of England (BOE) will cut interest rates this year may also put pressure on the pound.

Eurostat reported on Tuesday that the eurozone’s Harmonized Index of Consumer Prices (HICP) annual rate in June was 2.5%, in line with consensus expectations. Meanwhile, the core HICP rose 2.9% year-on-year, higher than the market consensus of 2.8%. Philip Lane, chief economist of the European Central Bank, said that the upcoming data for June “seems to be consistent with the ECB’s assessment” while also continuing to send signals that further rate cuts may be possible.

Later on Wednesday, investors will focus on Purchasing Managers’ Index (PMI) data from Germany, France and the eurozone. In addition, speeches by ECB officials Luis de Guindos, Piero Cipollone, Philip Lane and Christine Lagarde will also be highlights on Wednesday.

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