Snapshot: EUR/GBP is trading near 0.8530, pressured by the divergence in central bank policy outlooks. The Bank of England’s reluctance to cut rates, driven by sticky services inflation, contrasts with the ECB’s mild easing bias following the recent 25bp cut. Today’s session will focus on any further hints from ECB speakers regarding the path of future rate adjustments.
- Key level to watch: 0.8500 support
- Risk: Unexpected shift in BoE rhetoric towards a more dovish stance, potentially sparked by downside surprises to backward looking data.
Bias into NY: Short EUR/GBP, targeting a break below 0.8500, as the BoE’s comparatively hawkish stance keeps Sterling supported against the backdrop of a still dovish ECB. US 10Y real yields stabilising after the recent dip provide a mild headwind to the Euro.