EUR/GBP consolidates above 0.8350 ahead of ECB’s Lagarde speech

• EUR/GBP remains flat near 0.8355 in Thursday’s early European session. 
• The BoE policymaker confirmed it’s appropriate to only cut rates at a gradual pace.
• The ECB is expected to cut deeper interest rates until April next year, noted HSBC analysts.

The EUR/GBP cross flat lines around 0.8355 during the early European session on Thursday. However, a less dovish stance from the Bank of England (BoE) might provide some support to the Pound Sterling (GBP). Traders will take more cues from the European Central Bank's (ECB) policymakers' speeches later in the day, including ECB President Christien Lagarde, Frank Elderson and Luis de Guindos. 

The cautious stance of the Bank of England (BoE) could underpin the GBP against the Euro (EUR). BoE policymaker Megan Greene said on Wednesday “I believe the risks to activity are to the upside, which could suggest that the long-run neutral rate is higher and - all else equal - our stance of policy isn’t as restrictive as we had thought.  Given this risk, I believe it is appropriate to take a gradual approach to removing restrictiveness.”

On the other hand, the downbeat Germany’s IFO reports earlier this week added to German recession fears, prompting the expectation of additional rate cuts and might cap the upside for the Euro (EUR) in the near term. The ECB is likely to cut deeper interest rates than previously expected, by lowering its key deposit rate by 25 basis points (bps) at each of its upcoming meetings from now until April next year, noted HSBC analysts. The Eurozone Consumer Confidence and  Industrial Confidence for September will be published on Friday. Any signs of improvement in the Eurozone economy could help limit the shared currency’s losses in the near term.