EUR/GBP moves back and forth around 0.8580 ahead of ECB members’ speeches, BoE Minutes

EUR/GBP consolidates around 0.8580 during the European session on Wednesday. Bank of England (BoE) Monetary Policy Committee (MPC) Member Catherine Mann cited softening labor market conditions and slowing services inflation as factors influencing her decision to vote in favor of holding interest rates on Thursday. This stance has buoyed hopes among investors for the implementation of a looser monetary policy by the BoE.

Mann cautioned that financial markets are anticipating an excessive number of interest rate cuts this year and suggested that the Bank of England (BoE) is unlikely to act before the US Federal Reserve. She stated, "I think they're pricing in too many cuts."

The EUR/GBP cross could have received upward support following the release of softer-than-expected inflation data for February in the United Kingdom. This development has reshaped market expectations for the Bank of England (BoE) to potentially lower interest rates starting from the June meeting.

The Euro could face downward pressure due to growing speculation of a rate cut by the European Central Bank (ECB) in June. ECB policymaker Madis Muller indicated on Tuesday that the central bank is approaching a juncture where rate cuts may begin. Furthermore, ECB official Yannis Stoumaras noted a consensus for a rate cut in June.

Traders are expected to closely monitor speeches from ECB Chief Economist Philip Lane and ECB Executive Board member Piero Cipollone on Wednesday, along with the release of the European Commission’s Business Climate and Consumer Confidence data for March. On the United Kingdom’s (UK) side, the BoE Financial Policy Committee (FPC) Minutes and Statement will be released later in the day.

(This story was corrected on March 27 at 10:33 GMT to say, in the headline and the last paragraph, that markets await the release of the BoE's Financial Policy Committee Minutes, not the BoC.)