EUR/GBP finds temporary support near 0.8350 after ECB Accounts release

• EUR/GBP finds interim support near 0.8350 after the release of the ECB Monetary Policy Meeting Accounts.
• The ECB is expected to cut its borrowing rates further by 50 bps in the remainder of the year.
• Investors await the UK monthly GDP and the factory data to project the next move in the Pound Sterling.

The EUR/GBP pair discovers temporary support near 0.8350 in Thursday’s early North American session. The cross finds buying interest after the release of the European Central Bank (ECB) Monetary Policy Meeting Accounts for the September meeting. The minutes showed that policymakers expect inflation in Eurozone to rise again in the latter part of the year.

ECB accounts also indicated that inflation is on track to return to the bank’s target of 2% but refrained from announcing a victory over it.

However, the outlook of the Euro (EUR) is expected to remain weak as a decline in the flash Eurozone Harmonized of Consumer Prices (HICP) data for September to 1.8% and deepening risks to economic growth have prompted expectations of more rate cuts. For the remaining year, traders expect the ECB to cut interest rates further by 50 basis points (bps), suggesting that the ECB will reduce its Deposit Facility Rate by 25 bps next week and again in December.

In the September meeting, officials noted a faster-than-projected slowdown in the wage growth. The board expects the wage growth to soften even faster in the next year. This would keep price pressures under control and prompt expectation of more interest rate cuts going ahead.

In the United Kingdom (UK), the Pound Sterling (GBP) will be influenced by the monthly Gross Domestic Product (GDP) and the factory data for August, which will be published on Friday. Economists expect the UK economy to have grown by 0.2% after remaining flat in July.

For the Bank of England’s (BoE) interest rate outlook, traders expect the bank to cut interest rates for once in any of the two policy meetings remaining this year by 25 bps.