EUR/GBP retreats further from weekly top after ECB Stournaras’ dovish comments
|- EUR/GBP stalls a three-day-old uptrend in reaction to dovish remarks by ECB’s Stournaras.
- Delayed BoE rate cut bets underpin the GBP and further contribute to the intraday decline.
- Investors will keep a close eye on comments by other ECB officials for short-term impetus.
The EUR/GBP cross comes under heavy selling pressure on Thursday and for now, seems to have snapped a three-day winning streak to the 0.8560 area, or the weekly top touched the previous day. Spot prices drop to the 0.8535 region, or the fresh daily low during the first half of the European session and remain well within the striking distance of the monthly trough touched earlier this week.
The shared currency meets with some supply after European Central Bank (ECB) Governing Council member Yannis Stournaras backed the case for an early rate cut. Stournaras added that he doesn't buy the argument that the ECB cannot cut rates before the Fed and that four rate cuts in 2024 seem reasonable. This comes after several ECB officials floated the idea for the first rate cut in June and a further move in July, which, in turn, exerts pressure on the EUR/GBP cross.
The British Pound (GBP), on the other hand, remains well supported by expectations that the Bank of England (BoE) will keep interest rates higher for longer. The bets were reaffirmed by the monthly UK GDP print on Wednesday, which showed that the economy returned to growth in January after entering a shallow recession in the second half of 2023. This, in turn, is seen as another factor that contributes to the heavily offered tone surrounding the EUR/GBP cross.
Moving ahead, there isn't any relevant market-moving economic data due for release on Thursday, either from the Eurozone or the UK. Hence, investors will keep a close eye on comments from ECB policymakers, which will continue to influence the Euro and provide some impetus to the EUR/GBP cross. Apart from this, the top-tier US macro data might infuse some volatility in the markets and further contribute to producing short-term trading opportunities.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.