EUR/GBP edges higher above 0.8350 as traders brace for Eurozone/German PMI data

• EUR/GBP drifts higher to around 0.8380 in Monday's early European session. 
• Germany's upper house approved the measures to unlock hundreds of billions of Euros in debt-financed defense and infrastructure spending.
• The Pound Sterling softens despite slightly hawkish remarks from the BoE. 

The EUR/GBP cross gains traction to near 0.8380 during the early European session on Monday. The Euro (EUR) strengthens against the Pound Sterling (GBP) as Germany's upper house of parliament signed off on a landmark debt reform plan. Later on Monday, the preliminary reading of the Purchasing Managers Index (PMI) reports from Germany and the Eurozone will be in the spotlight.

The Bundesrat, Germany's second chamber of parliament, on Friday, voted in favor of a massive spending package that is set to pour billions of euros into defense, infrastructure and climate protection. This, in turn, continues to underpin the shared currency in the near term. 

The Pound Sterling has declined after the Bank of England (BoE) left interest rates unchanged on Thursday, keeping the central bank's benchmark rate at 4.5%. The decision had been widely anticipated by markets. The GBP weakens even though the steady interest rate decision seemed slightly hawkish. BoE Governor Andrew Bailey said there is a lot of uncertainty at the moment, but he still thinks the monetary policy is on a "gradually declining path."

The murky UK economic outlook, along with the elevated global policy uncertainty and weak confidence, could drag the GBP lower. However, investors will take more cues from the UK Consumer Price Index (CPI) inflation data for February, which will be published later on Wednesday.