EUR/GBP oscillates in a narrow range above the 0.8600 mark, German CPI eyed

• EUR/GBP oscillates in a tight trading band around 0.8604 on Wednesday.
• The softer Eurozone data might convince the European Central Bank (ECB) to pause interest rates in its next meeting. 
• Markets anticipate the odds of a rate hike by the Bank of England (BoE) in its September.

The EUR/GBP cross remains confined in the 0.8597-0.8607 range during the early European session on Wednesday. Market players await the release of the preliminary German Consumer Price Index for August. The cross currently trades around 0.8604, unchanged for the day. 

The weaker-than-expected economic data from the Eurozone might convince the European Central Bank (ECB) to pause interest rates at its next meeting on September 14. That said, the September’s German Gfk Consumer Confidence Survey reported on Tuesday came in at -25.5 versus -24.6 prior and worse than the expectation of -24.3. Additionally, the Eurozone money supply fell for the first time since 2010 as private sector lending slowed and deposits fell.

ECB policymakers were split between an interest rate halt and further tightening. This week's publication of Eurozone inflation figures and the ECB's updated economic projections might provide signals about future monetary policy and give a clear direction to the EUR/GBP cross. 

On the Pound Sterling front, the British Retail Consortium for August dropped to 6.9% year on year from 7.6% in July. According to the World Interest Rates Probabilities (WIRP) tool, markets are pricing in a 75% odds of a 25 basis point (bps) rate hike by the Bank of England (BoE) in September. This, in turn, might limit the downside of the Pound Sterling and act as a headwind for EUR/GBP.

Looking ahead, traders will monitor the preliminary German Consumer Price Index (CPI) for August due on Wednesday. The annual and monthly CPI figures are expected to rise 6% and 0.3%, respectively. Also, the Eurozone CPI, Retail Sales, and the ECB Meeting Minutes will be released later this week. Traders will take cues and find trading opportunities around the EUR/GBP cross.