EUR/GBP extends gains to near 0.8550 after hawkish comments from ECB Lagarde

• EUR/GBP appreciates after hawkish remarks made by ECB President Lagarde on Monday.
• ECB is anticipated to maintain its current policy measures for the foreseeable future.
• BoE is expected to delay rate cuts following the recent testimony to the UK Treasury Committee.

EUR/GBP advances to near 0.8550 during the European session on Tuesday. The Euro (EUR) strengthened following hawkish comments made by European Central Bank (ECB) President Christine Lagarde on Monday. Lagarde noted that while inflation is gradually approaching the central bank's targets, the ECB remains dedicated to maintaining its current policy measures for the foreseeable future.

Additionally, ECB President Lagarde mentioned that although fourth-quarter wage growth figures are encouraging, they are not sufficient to instill confidence in the ECB that inflationary pressures have been fully addressed.

Gfk German Consumer Confidence Survey came with a print of -29 for March as expected, against the previous reading for February was -29.6. Investors will be focusing on the release of EU Consumer Confidence data on Wednesday. Later in the week, attention turns to the Germany Retail Sales and Consumer Price Index (CPI) inflation data.

On the other side, with high-impact data absent this week, investors turn their attention to low-impact indicators such as Nationwide Housing Prices and Consumer Credit data. These releases will be scrutinized for any indications regarding the timing of potential rate cuts by the Bank of England (BoE).

Moreover, market sentiment appears to lean towards a potential delay in rate cuts, following recent testimony to the UK Treasury Committee by Bank of England (BoE) Governor Andrew Bailey and other policymakers. Bailey's remarks, though not providing a precise forecast of rate cuts, suggested a trajectory toward rate reduction. This speculation has buoyed the Pound Sterling (GBP), consequently limiting the losses of the EUR/GBP pair.