EUR/GBP holds losses near 0.8350 despite lower UK GDP figures

• EUR/GBP depreciates due to rising odds for the ECB’s interest rate cut in October.
• UK GDP rose by 0.5% QoQ in Q2, slightly below the expected and previous increase of 0.6%.
• The Pound Sterling is buoyed by expectations that the BoE will likely take a slower approach to rate cuts.

EUR/GBP retraces its recent gains from the previous session, trading around 0.8340 during the Asian hours on Monday. The currency cross remians tepid following the release of the Gross Domestic Product (GDP) data for the second quater from the United Kingdom (UK).

The UK Gross Domestic Product (GDP) grew by 0.5% quarter-over-quarter in the second quarter, slightly below the expected and previous increase of 0.6%. On an annual basis, GDP rose by 0.7%, also falling short of the forecasted and prior growth rate of 0.9%.

The EUR/GBP cross recieved downward pressure from the increasing odds of the European Central Bank (ECB) implementing another interest rate cut in October. Traders would likely observe a slew of economic releases from Germany scheduled to be released later in the day, including preliminary Consumer Price Index (CPI) data for September.

Additionally, lower-than-expected inflation in France and Spain has reinforced the likelihood of the third cut in the ECB's ongoing policy-easing cycle, which began in June. The ECB resumed cutting rates in September after holding them steady in July.

France's inflation grew by 1.5% year-over-year in September, significantly below the estimated 1.9% and down from the previous release of 2.2%. On a monthly basis, price pressures deflated at a sharp rate of 1.2%, exceeding expectations of a 0.8% decline. In Spain, the annual Harmonized Index of Consumer Prices (HICP) increased by 1.7% in September, lower than the forecasted 1.9% and a drop from August’s 2.4%. Month-on-month, the HICP fell by 0.1%, contrary to expectations for no change.