Ella 
In Asia on Monday, EUR/GBP continued its winning streak from Wednesday’s opening, rising to near the psychological mark of 0.8700. After the release of the Eurozone Purchasing Managers Index and the dovish policy decision announced by the Bank of England (BOE) last week, EUR/GBP continued to gain upward support.
The HCOB Services Purchasing Managers’ Index for September, released on Friday, rose to 48.4 from 47.9 in August, beating expectations of 47.7. The euro zone’s composite PMI rose to 47.1 from 46.7 in August, beating expectations of 46.5 and hitting a two-month high.
However, the HCOB PMI survey showed that the euro zone manufacturing PMI fell to 43.4 in September, below consensus expectations of 44.0 and the previous reading of 43.5.
In early trading on Friday, Phillip Lane, chief economist of the European Central Bank (ECB), emphasized that inflation exceeding 2% is costly to the economy and the central bank’s goal is to control inflation in the medium term.
In addition, according to Bloomberg, Francois Villeroy de Galhau, Governor of the Bank of France, said in an interview last weekend that he was in no rush to raise interest rates to 4.00% last week. further interest rate hikes.
Separately, a Reuters poll showed economists expect the European Central Bank to end its interest rate hike cycle and stay on hold until at least July next year.
Reports emerged over the weekend that the windfall profits tax on Italian banks, which has been reduced since its introduction in August, may be effectively scrapped. Between 2021 and 2023, banks will not need to pay 40% of the additional profits as taxes, but may instead avoid paying taxes by allocating 2.5 times the tax amount to increase their Tier 1 capital ratios.
In the UK, the Bank of England (BOE) decided on Thursday to abandon the market-expected interest rate hike on the grounds that British inflation data were generally lower than expected.
The Bank of England unexpectedly decided to pause its interest rate hike cycle, causing the pound to perform relatively poorly. This development is also seen as a factor putting downward pressure on the EUR/GBP pair. It is worth noting that the Bank of England has previously raised interest rates 14 times in a row.
Investors are awaiting a speech by European Central Bank President Christine Lagarde later in the day, which may provide some further clues on the future interest rate path policy.
