EUR/GBP hovers near two-week lows at 0.8220 following ECB’s rate cut.

• The Euro remains practically unchanged, near two-year lows after the ECB’s rate cut.
• The European Central Bank eased interest rates to 3% from the previous 3.25% as widely expected.
• The BoE is expected to keep a less dovish outlook amid a resilient UK economy and higher inflationary trends.

The Euro remains depressed near two-year lows at 0.8220 following a widely expected 25 bps rate cut by the ECB. The pair has accelerated its downtrend this week and is approaching an eight-year low, at 0.8200.

European Central Bank eased its benchmark interest rate to 3% from 3.25% as widely expected. In a few minutes, President Lagarde will meet the press where she will be asked about the timing of the next rate cut.

The grim outlook of the Eurozone economy, coupled with the political uncertainty in the Regiou’s two main economies is adding pressure on the central bank to ease borrowing costs, even with inflation above target.

In the UK, the economy is showing more resilient, and the heavy spending budget released by the Labour cabinet is expected to stir inflationary prices. That will likely force the BoE to approach monetary easing more cautiously.