Snapshot: EUR/GBP is trading with a heavy bias today as the ECB wage tracker shows negotiated wage pressures stabilising in 2026, reinforcing the regional easing cycle. This contrasts with sticky UK inflation, where today’s CPI print of 2.8% and core CPI ticking up to 2.6% keep the Bank of England on hold. Desk attention now turns to ECB President Lagarde speaking at 12:50 CET.
- Key support at 0.8450 remains vulnerable as the ECB’s mild easing bias, fresh off April’s 25bp cut to 2.50%, contrasts sharply with the BoE’s cautious 8-1 split and 5% services inflation.
- Watch the NY session open for secondary macro drivers, where a strong WTI crude at $95/bbl supports the UK’s sticky inflation narrative, keeping the MPC reluctant to commit to a cut path.
Bias into NY: We hold a bearish bias on EUR/GBP, targeting a test of 0.8420. The fundamental policy divergence favors Sterling, with any dovish rhetoric from Lagarde likely to accelerate the slide.