EUR/GBP faces selling pressure above 0.8500 following upbeat UK labor market data on Tuesday. The cross is trading at 0.8524, down 0.08% on the day, as the British Pound (GBP) strengthens. UK’s Office for National Statistics reported a drop in the ILO Unemployment Rate to 3.8% in three months to December, surpassing market expectations. However, the number of people claiming jobless benefits rose by 14.1K in January. Traders anticipate interest rate cuts from the European Central Bank (ECB), with expectations of 118 basis points of cuts in 2024.
ECB Governing Council member Fabio Panetta suggested a reversal in monetary policy due to disinflation. The UK CPI inflation and Producer Price Index (PPI) are awaited on Wednesday, along with the Eurozone and German ZEW Survey. Additionally, preliminary UK GDP growth data for Q4 and Eurozone GDP numbers will be released later in the week, influencing trading opportunities around the EUR/GBP cross.
