EUR/GBP consolidates above 0.8300 ahead of PMI figures from Eurozone, UK

• EUR/GBP holds its position ahead of PMI data from both economies.
• The Euro appreciated after President Macron's appointment of centrist ally François Bayrou as France's Prime Minister.
• The BoE is anticipated to take a cautious and gradual approach to easing monetary policy.

EUR/GBP moves sideways following two days of gains, trading around 0.8320 during the European hours on Monday. Traders are awaiting Purchasing Managers Index (PMI) data from both economies to gauge private business activities for both the manufacturing and services sectors.

The EUR/GBP cross gained ground as the Euro received support following President Emmanuel Macron's appointment of centrist ally François Bayrou as France's Prime Minister, raising hopes for political stability. Macron had pledged to swiftly select a new candidate after Michel Barnier was forced to resign following a confidence vote in Parliament.

Moreover, European Central Bank (ECB) Governing Council member Robert Holzmann said on Friday that cutting interest rates solely to stimulate the economy would be a mistake. According to Holzmann, the ECB's primary responsibility is to ensure price stability, not to fuel economic growth. "Lowering rates now to boost the economy would contradict our current stance," he said, as reported by Bloomberg.

The upside of the EUR/GBP cross could be limited as the Pound Sterling (GBP) may appreciate due to the increased likelihood of the Bank of England (BoE) adopting a gradual pace of policy easing compared to other central banks in Europe and North America. The BoE and other forecasting bodies expect that inflation will rise next year in the wake of UK finance minister Rachel Reeves' big-spending budget. However, BoE Governor Andrew Bailey indicated four interest rate cuts in 2025, which could limit the upside of the British Pound (GBP) and support the EUR/GBP cross.