EUR/GBP inches higher to near 0.8550 ahead of Eurozone Consumer Prices

• EUR/GBP gained ground on softer Consumer Inflation Expectations.
• ECB’s Pablo Hernandez suggested that the central bank might commence interest rate cuts in June.
• Eurozone HICP and Trade Balance data are scheduled to be released on Monday.

EUR/GBP advances for a second consecutive session, trading higher around 0.8550 during the Asian session on Monday. The Consumer Inflation Expectations, released by the Bank of England (BoE) on Friday, increased by 3.0%, although slightly lower than the previous uptick of 3.3%.

The softer inflation data has spurred speculation in markets about a potential Bank of England (BoE) rate cut in June, which could weaken the Pound Sterling (GBP) and provide support for the EUR/GBP cross.

Moreover, the Rightmove House Price Index (MoM) for March surged by 1.5% on Monday, exceeding the previous increase of 0.9%. Additionally, the annual report showed a rise of 0.8% compared to the previous 0.1%.

However, the European Central Bank (ECB) maintained borrowing costs at record highs during its March meeting, though policymakers hinted at discussions regarding a potential rate cut. This dovish stance from ECB officials could present additional challenges for the Euro. François Villeroy de Galhau, an ECB policymaker, suggested the likelihood of a rate cut in the spring.

Furthermore, ECB policymaker Pablo Hernandez de Cos stated on Sunday that the central bank opted to keep borrowing costs at record highs this month. He also indicated that the central bank might commence interest rate cuts in June following a decrease in Eurozone inflation.

On Monday, market attention will be on the Eurozone Harmonized Index of Consumer Prices (HICP) and Trade Balance. Looking ahead to Tuesday, traders will closely monitor various market indicators from the United Kingdom (UK), including the Consumer Price Index, Producer Price Index, and Retail Price Index.