EUR/GBP continues to rise, reaching 0.8460 during Monday’s European session. The British Pound is facing pressure after the Bank of England hinted at a potential rate cut in August. ING’s FX Strategist Francesco Pesole predicts three rate cuts starting in August, which is more dovish than market expectations. The UK’s slow private sector growth in June has added to the pressure on the Pound, supporting the EUR/GBP cross.
However, the Euro may face challenges due to uncertainties surrounding a snap election in France, leading to concerns about potential fiscal issues in the Eurozone. Additionally, Germany’s IFO Business Climate Index fell to 88.6 in June from 89.3 in May, below market expectations. This weaker data from Germany could further weigh on the Euro and limit the upside for the EUR/GBP cross.