Isabel Schnabel's statement caused euro to confidently rise, as she highlighted the risks of maintaining inflation at a relatively high level. She stated that the European Central Bank's decision on interest rates will be based on data, but essentially, it will be raised until inflation drops to target levels. Therefore, since inflation in Europe continues to be noticeably higher than in the US, interest rates of the ECB will eventually be higher than that of the Fed.
On the other hand, pound remained stagnant despite UK inflation remaining unchanged. This removes any questions not only regarding today's session, but also indicates that the Bank of England will continue to actively raise interest rates. However, the previous week's meetings of the Fed and the ECB did not go as expected, so investors may not be willing to take risks, preferring to wait for the outcomes of today's session. This will make pound recover only after the meeting, and much will depend on subsequent comments.
Despite being overbought, EUR/USD came close to the psychological level of 1.1000 after a speculative jump, indicating a bullish sentiment. Staying above this control level will lead to further growth, as long as the pair bounces from 1.1000.
GBP/USD hit the level of 1.2700, reducing the volume of short positions relative to it. This led to a partial increase of prices, but did not result in anything radical in the market. All subsequent movements will be related to the outcomes of the Bank of England's meeting.