EUR/GBP strengthens above 0.8300 despite rising bets of aggressive ECB rate cuts

• EUR/GBP drifts higher to around 0.8320 in Monday's early European session. 
• The weaker-than-expected Eurozone PMI triggers ECB rate-cut bets. 
• The downbeat UK Retail Sales and flash PMI weigh on the GBP, but the cautious stance from the BoE might cap its downside. 

The EUR/GBP cross strengthens to near 0.8320 during the early European trading hours on Monday. The upside of the shared currency might be limited amid rising speculation the European Central Bank (ECB) will implement aggressive interest rate cuts to prop up the faltering regional economy.

Traders raise their bets that the ECB could deliver a bigger half-point rate cut after the downbeat Eurozone Purchasing Managers Index (PMI) data on Friday. This, in turn, might exert some selling pressure on the Euro (EUR) against the Pound Sterling (GBP). 

"This report truly puts a 50-basis-point cut on the table for December," noted Matthew Landon, JP Morgan Private Bank's global market strategist. Additionally, the ECB Governing Council member Martins Kazaks said that the central bank should lower interest rates next month due to the weak economy. 

The weaker UK Retail Sales and PMI data could boost the Bank of England's (BoE) dovish bets for December and weigh on the GBP. Data released by the Office for National Statistics (ONS) on Friday showed that UK Retail Sales dropped 0.7% MoM in October versus a 0.1% increase (revised from 0.3%) in September. This figure came in below the market consensus of -0.3%.  

However, the cautious stance from the BoE officials might help limit its losses. Traders will monitor the speeches from MPC members Clare Lombardelli, Swati Dhingra, and Huw Pill on Monday for fresh impetus.