EURGBP declines toward 0.87 due to Russia-Poland tensions, while investors await the UK Autumn Statement/CPI

Early in Tokyo, the EURGBP pair wavered between 0.8720 and 0.8740 after falling perpendicularly from the round-level resistance of 0.8800. In the context of escalating global tensions, it is projected that the cross will resume its downturn and may find support near 0.8700.

After wreaking havoc in Ukraine, Russia has increased its military operations against NATO member Poland, lowering investor sentiment in the Eurozone. The upshot of Poland's hosting a meeting of NATO ambassadors will provide increased impetus for investors to engage in more activity. An escalation of geopolitical tensions may exacerbate supply chain issues within the trading bloc.

The primary focus will be on the speech of Christine Lagarde, president of the European Central Bank (ECB). It is anticipated that the President of the European Central Bank (ECB) will provide hints regarding future monetary policy actions. In addition, inflationary pressure guidance will be of the utmost importance.

On the British front, the release of inflation data and the first Autumn Statement under Prime Minister Rishi Sunak and Chancellor Jeremy Hunt will be key.

The headline Consumer Price Index (CPI) is much higher at 10.7% compared to 10.1% in the previous edition. While the core CPI, which excludes the cost of oil and food, may decline slightly to 6.4% compared to the prior estimate of 6.5%, this decrease is unlikely to be significant.

To bridge the £60 billion budget imbalance, investors will focus on the proportion of tax hikes to spending cuts in the Autumn Budget. Sky News was briefed by Treasury officials that the "black hole" may be as large as £60 billion, demanding up to £35 billion in spending cuts and an additional £25 billion in tax income. Moreover, the energy bill cap will be quite relevant.