EUR/GBP declines towards 0.8900 as focus shifts to ECB Lagarde’s speech

• EUR/GBP is declining towards 0.8900 as the cross has weakened after surrendering 0.9000.

• Eurozone Consumer Confidence is dropping continuously for the past year.

• UK’s GDP is expected to remain steady this week.

The EUR/GBP pair has witnessed a vertical fall after facing barricades around 0.9000 in the early Tokyo session. On a broader note, the cross is declining after failing to sustain above the crucial resistance of 0.9200. The asset is expected to decline further to near 0.8900 ahead of the European Central Bank (ECB) President Christine Lagarde’s speech.

ECB’s Lagarde will likely dictate the likely monetary policy action ahead. ECB policymaker is expected to continue its hawkish stance on interest rate guidance as price pressures are escalating and are needed to be contained sooner. Energy prices are soaring sharply and are impacting the consumption expenditure of households.

On Monday, ECB Governing Council member and German central bank head Joachim Nagel said that decisive rate hikes are needed amid rising risks of inflation expectations getting de-anchored. Nagel favored a decisive action to bring down the inflation rate to 2%.

Apart from the ECB Lagarde’s speech, investors will also focus on the Eurozone Consumer Confidence data, which will release on Thursday. The sentiment data is seen steady at -28.8. Investors should be aware of the fact that the sentiment data is declining consecutively for the past few months.

Meanwhile, pound bulls are focusing on the Gross Domestic Product (GDP) data release, which is due on Friday. The growth rate is expected to decline by 0.1% in line with the prior release. While the annual data will grow by 2.9% similar to the previous reading.