Ella 
EUR/GBP continues to move higher for the second consecutive session, trading around 0.8400 during the Asian session on Tuesday. However, the cross remains close to 0.8386, the lowest level since August 2022 recorded on Monday.
Bullish expectations surrounding the European Central Bank (ECB) provided support for the euro. The ECB is expected to keep its main refinancing rate at 4.25% at its upcoming July meeting on Thursday. The European Central Bank cut interest rates in June for the first time since 2019 after keeping them on hold for nine consecutive months. Analysts predict there could be two more rate cuts later this year, in September and December.
In terms of sterling, investors increasingly view UK financial markets as a better investment destination than European and US markets, which are facing political uncertainty. Keir Starmer’s Labor Party won a resounding victory, ensuring stable fiscal policy and streamlined ministerial appointments. This positive sentiment provides support for Pound Sterling (GBP).
In addition, increased uncertainty about the timing of a potential rate cut by the Bank of England (BOE) also supported the strength of the pound. Traders expect the Bank of England to start cutting interest rates at its August meeting.
Traders assessed upcoming economic data on Wednesday that could influence the Bank of England’s monetary policy stance. Consumer prices (annual growth) are expected to hold steady at the Bank of England’s 2% target, with core inflation expected to fall to 3.4%. Additionally, the retail price index is likely to fall, which would be its fourth decline in five months.
