• EUR/GBP breaks its four-day losing streak due to dovish comments from BoE Governor Andrew Bailey.
• BoE’s Bailey believes that inflation outlook is downwards, suggesting the interest rates path will also be downwards, gradually.
• German Business Climate Index declined to 85.4 in September, against August’s 86.6 and expected 86.0 readings.

EUR/GBP breaks its four-day losing streak, trading around 0.8330 during the European hours on Tuesday. This upside of the EUR/GBP cross could be attributed to the dovish comments from the Bank of England (BoE) Governor Andrew Bailey.

BoE Governor Andrew Bailey said, “I'm very encouraged that the path of inflation is downwards therefore I do think the path for interest rates will be downwards, gradually.” Bailey added, “My best guess will be interest rates settle at a 'neutral rate'.”

UK Prime Minister Keir Starmer is expected to warn of a "shared struggle" ahead but will emphasize that there is "light at the end of the tunnel" for the country during his first speech at the Labour Party conference. Starmer will state that "tough" decisions are necessary now to "build a new Britain," per BBC.

On the data front, Germany’s headline IFO Business Climate Index declined to 85.4 in September, down from 86.6 in August, missing market expectations of 86.0. The Current Economic Assessment Index also fell to 84.4, below the forecasted 86.1, compared to 86.4 in the previous month. Meanwhile, the IFO Expectations Index, which reflects firms' outlook for the next six months, dropped to 86.3 in September, in line with expectations, from 86.8 in August.