EUR/GBP retraces recent losses before Eurozone Economic Sentiment, improves to near 0.8550

• EUR/GBP gains ground ahead of the Eurozone Economic Sentiment Indicator on Wednesday.
• Commerzbank's economists observe no clear trend suggesting a weaker Euro.
• BoE’s Dave Ramsden stated that UK inflation is more homegrown.

EUR/GBP recovers recent losses registered on Tuesday, edging higher to near 0.8550 during the early European hours on Wednesday. The pair experiences upward support while traders adopt a cautious stance ahead of the Eurozone Economic Sentiment Indicator for February.

European Commission is expected to report that the consumers' confidence, in economic activity, may slightly improve to a reading of 96.7 from 96.2 prior. However, on Tuesday, the Gfk German Consumer Confidence Survey for March printed a reading of -29 as expected, compared to the previous reading of -29.6 in February. Later in the week, the focus will be on the Harmonized Index of Consumer Prices data from the Eurozone and Germany for further insights into the economic landscape.

Economists at Commerzbank mention that Friday's inflation figures would be crucial but no discernible trend indicating a weaker Euro. Earlier this week, European Central Bank (ECB) President Christine Lagarde mentioned that although inflation is steadily approaching the central bank's targets, the ECB is committed to keeping its current policy measures unchanged for the foreseeable future.

Bank of England (BoE) Deputy Governor for Markets and Banking, Dave Ramsden, attended the High-Level Conference hosted by the Hong Kong Monetary Authority and the Bank for International Settlements in Hong Kong on Tuesday. Ramsden highlighted persistent inflationary pressures, noting that inflation in the United Kingdom (UK) is primarily domestically driven. He suggested that monetary policy may need to remain restrictive for an extended period to return inflation to the 2% target.

Investors are likely to closely monitor the speech by Catherine L Mann of the Bank of England for further insights into the central bank's stance on monetary policy and inflation management.