EUR/GBP consolidates below 0.8640 ahead of ECB meet
|- EUR/GBP remains muted in the Asian trading session.
- EUR is under pressure ahead of the ECB meeting
- Brexit woes, Delays in economic reopening weigh on sterling.
The EUR/GBP pair remains muted on Thursday in the Asian trading hours. The cross-currency pair squeezes in a very close trading band.
At the time of writing, EUR/USD trades at 0.8624, up 0.02% for the day.
The ECB in its Thursday meeting will announce its quarterly projections for inflation and growth, with the rate decision and a press conference to follow. The recent economic data suggest that with the ease of lockdown and the faster rollout of vaccination, the Eurozone economy would rebound strongly in the second half of the year.
The Eurozone inflation in May accelerated to 2%, up from 1.6% in April. However, the rising pricing pressure is being downplayed by the central bank. Market participants expect the ECB to maintain its status-quo on the interest rate decision. The shared currency remained sidelined ahead of the decision.
On the other hand, the sterling is facing the challenge of the probable delay in the UK government plan of complete re-opening of the economy on June 21, due to the “Delta” covid-19 stain. If the lockdown is extended for another 15 days or a month then it could negatively impact the British pound.
In addition to that, the increasing discord between UK-EU over the Northern Ireland protocol could instigate a trade war. This could impact GBP valuations against the US dollar and euro.
As for now, traders are eagerly waiting for the ECB Interest Rate and Deposit rate decision as well as the ECB Press Conference to gauge the market sentiment.
EUR/GBP additional levels
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