- Euro/GBP decreases due to the increased probability of cuts in the rates of European Central Bank.
- Villeroy described the European Central Bank Trump’s tariff as “a very worrying development.”
- Traders expect that they will reduce the average of 25 basis points on Thursday.
EUR/GBP is trading around 0.8330 during the European session on Monday after recovering part of its daily losses. However, EUR/GBP Cross face challenges as the euro remains under pressure due to the increasing expectations for further discounts in interest rates by the European Central Bank (ECB). The January Consumer Prices for the European Monetary Union will be revised later in the day.
Last week, the European Central Bank reduced the rate of deposit facilities by 25 basis points (BPS) to 2.75 %, while the rate of main re -financing operations decreased to 2.9 %, as expected. The markets were already affected by the reduction of prices, expecting that inflation in the euro area will remain on the right track towards the European Central Bank’s goal by 2 %.
On Monday, Francois Felieroy de Galhao, the European Central Bank, said that US President Donald Trump’s tariff would increase economic uncertainty, describing it as “a very disturbing development.” He added that there are possible additional price cuts, according to Reuters.
On Saturday, the United States reported that it would impose a 25 % tariff on Canadian and Mexican goods, while Chinese exports will face a 10 % tariff. These customs duties are scheduled to enter on Tuesday and will remain in place until the excessive fentian dose crisis is sorted.
The negative aspect of the EUR/GBP husband may be limited as the pound sterling (GBP) faces risks due to the expectations that the Bank of England (Bank of England) will restart its policy session, which probably reduces interest rates by 25 basis points (BPS) To 4.5 % in February.
Investors closely monitor the monetary policy decision at the Bank of England next Thursday, with expectations from the permanent situation given the signs of slowdown, despite the continued speedy wage growth. Monetary policy guidelines at the Bank of England can be that recent inflation indicators showed signs of slowdown, although wage growth remains at a rise. Participants in the financial market expect three discounts in interest rates from England this year, amid low demand for employment and poor business confidence.