The EUR/GBP cross stages a modest bounce from a nearly five-month low, around the 0.8670 region touched this Wednesday and sticks to its modest gains through the early part of the European session. Spot prices, however, struggle to capitalize on the move and remain below the 0.8700 round-figure mark.

Against the backdrop of the recent sharp decline, the intraday uptick in the EUR/GBP cross could be attributed to some short-covering. The upside for the EUR/GBP cross, however, remains capped amid mixed comments from the European Central Bank (ECB) officials. In fact, Isabel Schnabel, a member of the ECB's Executive Board, stated that there is no doubt that the central bank will have to take additional measures to bring inflation back to target.

Separately, the ECB Governing Council member Yannis Stournaras told a Greek newspaper on Wednesday that we are close to the end of the tightening cycle and as things stand now, we can say that interest rate hikes will be over in 2023. This, in turn, might hold back traders from placing aggressive bullish bets around the shared currency and keep a lid on any meaningful appreciating move for the EUR/GBP cross, at least for the time being.

The British Pound, on the other hand, continues to draw support from rising bets for another 25 bps rate hike by the Bank of England (BoE) on Thursday. This might further contribute to capping the EUR/GBP cross in the absence of any relevant market-moving economic releases, either from the Eurozone or the UK. Traders also seem reluctant and might prefer to wait on the sidelines ahead of the highly-anticipated BoE policy meeting on Thursday.