Ella 
During early European trading on Thursday, the EUR/GBP cross closed positive for the second consecutive day. Investors will be closely watching the European Central Bank’s (ECB) interest rate decision later on Thursday, which is expected to keep interest rates unchanged. The pair is currently trading around 0.8726, up 0.02% on the day.
The market expects the European Central Bank’s policy interest rate to remain basically unchanged in the second half of this year, thus ending the interest rate hike cycle. However, European Central Bank President Christine Lagarde may signal tightening policy compared to the Bank of England (BOE). This in turn could push up the euro against the British pound.
In addition, European Central Bank President Christine Lagarde said on Wednesday that the central bank will pay close attention to the development of the crisis in the Middle East and its possible impact on the euro zone economy.
On the other hand, disappointing UK economic data weighed on the pound. S&P Global reported that the manufacturing Purchasing Managers’ Index (PMI) remained in recession territory, while employment data showed the labor market was slowing. The data could persuade the Bank of England to hold interest rates steady at 5.25% at its Nov. 2 meeting amid growing worries about an economic recession.
Next, the European Central Bank’s monetary policy meeting will become the focus. Following the rate decision, the ECB press conference will be closely watched by traders. Market participants will take cues from these events ahead of next week’s Bank of England rate decision.
