The EUR/GBP pair continues to trade near 0.8605, showing strength for the third consecutive day on Thursday. The Bank of England (BoE) is expected to maintain its main interest rate at a 16-year high of 5.25% during its May meeting. ECB’s Pierre Wunsch mentioned the possibility of rate cuts this year, although the situation remains uncertain.
During early European trading hours on Thursday, EUR/GBP is on the rise, with traders anticipating the BoE’s interest rate decision. There is speculation that the BoE might lower rates before the ECB, which could weigh on the British Pound against the Euro.
The BoE is likely to keep its interest rate unchanged at 5.25%, with investors closely watching Governor Andrew Bailey’s statements on potential rate cuts. Bailey has hinted at the possibility of future rate cuts due to easing inflation risks.
Market expectations suggest that the first rate cut by the BoE could happen between June and August. On the other hand, attention is now turning to the ECB’s Monetary Policy Meeting Accounts on Friday, which could provide insights into the economic outlook and interest rate projections.
ECB policymaker Pierre Wunsch has indicated a potential rate cut this year, with a projected 50 basis points reduction depending on economic data. The uncertainty surrounding the future rate cuts adds to the overall cautious sentiment in the market.