Snapshot: EUR/GBP is trading around 0.8510, down roughly 30 pips after hotter-than-expected UK CPI data this morning. The data has tempered expectations of a near-term Bank of England rate cut, contrasting with the ECB’s recent easing. Focus shifts to the Monetary Policy Report Hearings at 14:15 London.
- Watch for a break below 0.8500, which could open the door to further downside.
- Risk of a short squeeze if the Monetary Policy Report Hearings lean dovish, given stretched short GBP positioning.
Bias into NY: Bearish on EUR/GBP as the UK inflation print supports a hawkish repricing of the Bank of England path; a continued rise in US 10-year real yields may also amplify downside pressure on the cross.