Snapshot: EUR/GBP is trading heavily near the 0.8410 level, down 35 pips on the session, as the Bank of England’s decision to maintain Bank Rate at 3.75% reinforces Sterling’s yield advantage. Today’s hold, coupled with core CPI ticking up to 2.6% in the May print, cements a cautious MPC that contrasts sharply with the ECB’s active easing cycle.
- Strong UK earnings growth at 4.0% and sticky core inflation keep BoE rate-cut expectations firmly at bay, opening a path for a test of the key support level at 0.8380.
- The primary risk heading into the New York session is spillover from US macro data at 08:30 ET, where a softer US print could trigger broad USD selling, compounding EUR/GBP downside through cross-rate flows.
Bias into NY: We are structural sellers of Euro/Sterling on rallies, targeting a break below 0.8380. The widening policy divergence between a stationary BoE and an easing ECB remains the dominant force, with any USD-driven volatility offering a better entry point.