EUR/GBP moves below 0.8550 on downbeat German data, focus on ECB Lagarde speech
- EUR/GBP trades lower around 0.8550 due to weak data from Eurozone and Germany.
- ECB President Lagarde will deliver a speech during a press conference on Monday.
- Traders seem cautious about hawkish expectations amid gloomy economic scenario in the UK.
EUR/GBP trades lower around 0.8550 during the European session on Monday, struggling to hold ground after the releases of disappointing data from the Eurozone and Germany. As said, Germany’s Trade Balance for July reduced to €15.9B compared to the expected €18.0B, which was €18.7B in the previous month. Along with this, Eurozone’s Sentix Investor Confidence (Sep) showed a decline of 21.5 from the previous 18.9 decline.
Furthermore, the cross pair is facing downward pressure as investors exercise caution, fearing that additional monetary tightening by the European Central Bank (ECB) could potentially push the Eurozone's economy into a recession.
Traders await the ECB President Christine Lagarde’s speech during the press conference scheduled for later in the day. During this conference, Lagarde may provide insight into the ECB's assessment of both the present and future condition of the Eurozone's economy.
On Saturday, ECB Governing Council member, Pierre Wunsch emphasized prevailing inflation as a factor for supporting the necessity of further tightening of monetary policy. During a radio interview broadcast by Bloomberg on Saturday, Pierre stated "I'm leaning towards the idea that we might need to take further action."
Conversely, EUR/GBP traders seem to adopt a cautious stance, given the challenging economic conditions prevailing in the United Kingdom (UK). The hawkish expectations raise concerns over the potential negative impact on the UK economy due to the further rise in interest rates during the Bank of England's (BoE) September meeting.