EUR/GBP continues to lose near 0.8670, Eurozone HICP data eyed

• EUR/GBP extends losses following the ECB President Christine Lagarde’s speech at the European Parliament.
• ECB’s interest rates will remain restrictive for as long as necessary.
• Investors await the Eurozone’s HICP, seeking insights into the inflationary pressures in the bloc.

EUR/GBP extends its losses on the second successive day, trading lower around 0.8670 during the Asian session on Tuesday. The pair is facing downward pressure following the European Central Bank's (ECB) President Christine Lagarde’s remarks at the European Parliament.

Lagarde observed a general deceleration in economic momentum across the European Union (EU), accompanied by a gradual moderation in job creation. However, the policymaker also highlighted that inflation is expected to remain "too high for too long" and emphasized that rates will remain restrictive for as long as necessary.

ECB confronts a complex predicament, as it must delicately manage the fine line between addressing inflationary forces and avoiding detrimental effects on the disparate domestic economies within the Eurozone.

Investors await the data release of the Eurozone’s Harmonized Index of Consumer Prices (HICP), which is scheduled for Friday.

These datasets may provide crucial insights into the inflationary pressures in the bloc and could impact trading decisions involving the Euro.

In the United Kingdom (UK), the Bank of England (BoE) opted not to move forward with a widely expected interest rate increase on Thursday. This decision was based on inflation figures for the UK economy that fell generally below expectations.

The surprising pause in the BoE's rate hike cycle has added to the British Pound's (GBP) relative underperformance. It is also seen as a factor exerting downward pressure on the EUR/GBP pair. Notably, the UK central bank had previously implemented 14 consecutive interest rate hikes.