EUR/GBP Steady Below 0.8350 Ahead of German CPI Data

The EUR/GBP pair remains stable near 0.8330 during Thursday’s early European trading session. A cautious outlook and diminishing expectations for a Bank of England (BoE) rate cut in December lend support to the Pound Sterling (GBP), exerting slight downward pressure on the cross.

BoE officials continue to approach rate cuts cautiously. Deputy Governor Clare Lombardelli emphasized concerns about persistent services inflation in the UK, which remains well above pre-Covid levels and the 2% inflation target. Lombardelli noted the need for clearer signs of easing price pressures before endorsing further rate cuts.

Meanwhile, European Central Bank (ECB) policymakers voice worries about the Eurozone’s economic outlook. Increasing speculation about aggressive ECB rate cuts to support the struggling regional economy could weigh on the Euro (EUR) relative to the GBP in the near term.

Market participants now await Germany’s preliminary November Consumer Price Index (CPI), set to release on Thursday. The annual CPI is anticipated to rise to 2.2% from October’s 2.0%. A higher-than-expected reading could bolster the Euro, offering potential support for the EUR/GBP pair.