UK Economy Outperforms as Pound Rises, While ECB Braces for More Rate Cuts
• UK unemployment rate dropped to 3.8% in Dec, better than forecast, lifting the Pound and pressuring EUR/GBP down.
• Traders expect over 100 basis points of ECB rate cuts in 2024 as disinflation progresses.
• UK CPI, GDP, and retail sales data due out this week may show recession, influencing EUR/GBP.
• ECB's Panetta says time for policy reversal approaching as disinflation well underway.
• If upcoming UK data weaker than expected, could exert selling pressure on GBP and boost EUR/GBP.