EUR/GBP gains traction above 0.8400 after German inflation data

• EUR/GBP rises above 0.8415 in Wednesday's early session.
• German HICP inflation came in at 2.2% in April. 
• ECB's Schnabel said the central bank should keep a steady hand and hold rates close to current levels. 

The EUR/GBP cross trades in positive territory near 0.8415, snapping the seven-day losing streak during the early European trading hours on Wednesday. The Euro (EUR) recovers some lost ground as markets reduce bets on European Central Bank (ECB) interest rate cuts amid easing in trade and geopolitical tensions.

ECB board member Isabel Schnabel, an outspoken policy hawk, said on Friday that the central bank should stop cutting borrowing costs as turmoil in the global economy is fueling price pressures and inflation was at risk of exceeding the ECB's 2% target in the medium term. The less dovish remarks from ECB policymakers, along with the easing tensions after the US-China trade talks, provide some support to the shared currency. 

Financial markets see a 90% possibility of a rate cut in June and see another cut or two in subsequent months, indicating that Schnabel's view goes counter to investor bets.

Data released by the Federal Statistics Office reported on Tuesday that the German Harmonized Index of Consumer Prices (HICP) rose 2.2% in April, compared the March's reading and the consensus of 2.2%. On a monthly basis, the HICP increased by 0.5%, after a 0.5% rise in the previous month.

On the other hand, cooling employment and softening wage growth have triggered the expectation for the Bank of England (BoE) rate cuts. Last week, the BoE decided to lower its borrowing rates by 25 basis points (bps) to 4.25% and retained a "gradual and careful" monetary expansion approach.