EUR/GBP finds fresh modest gains despite dovish ECB

The EUR/GBP pair had a 0.10% increase on Thursday and is currently trading at 0.8540. The GBP will eventually gain from the ECB and BoE’s different monetary policies.

The markets are pointing to an April rate cut from the ECB and a June rate cut from the BoE. The EUR/GBP pair is trading at 0.8540 on Thursday, indicating slight gains.

The European Central Bank’s dovish posture is putting pressure on the pair and raising the likelihood of an April rate cut. Meanwhile, GBP maintains its undercurrent due to the Bank of England monetary policy which seems to be pushing the easing cycle to June.

Furthermore, despite continued resistance from ECB officials, markets still price in roughly 65% odds for rate cuts to start in April, forecasting 125 bps of easing this year.

In contrast, investors expect the US central bank to reduce interest rates by approximately 100 basis points over the course of the next twelve months, starting in June, as a result of recent economic data that indicates the British economy is still strong.

Furthermore, there could be more decline in the cross if the UK economy keeps growing and markets postpone the BoE’s interest rate reductions.

Technically, the signs on the daily chart suggest that purchasing momentum may be dominating.