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EUR/GBP rebound to slow? – KBC

FXStreet (Barcelona) - According to The KBC Market Research Team, the soft ECB comments triggered losses in EUR/GBP after holding close to 0.8000 area over the weekend.

Key Quotes

“Yesterday, sterling trading showed a mixed picture. Soft BoE comments over the weekend initially held EUR/GBP close to the 0.8000 area. In the afternoon, the soft ECB comments trigged losses in this euro cross rate.”

“Today headline UK CPI is expected stable at 1.2% Y/Y. We join the consensus. In the wake of the BoE inflation report, several BoE members spoke soft on inflation. The pound reacted accordingly.”

“A lot of BoE inflation softness should already be discounted. In case of no negative surprise, the recent correction of sterling might gradually try to build a bottom.”

“Of late, the 0.7755/0.78 area proved to be tough support for EUR/GBP. Sterling negative sentiment was reinforced by a softer than expected BoE inflation report.“

“We continue to look out for signs of the EUR/GBP rebound losing momentum. For now, such a signal is not yet available. We don’t row against the tide (yet). Even so, EUR/GBP returning to the 0.80 area might be a first level to re-evaluate recent development.”

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