Snapshot: EUR/GBP is currently trading at 0.8637, up marginally by 0.02% on the day. The primary driver remains the divergence in monetary policy between the ECB and the BoE, with the ECB recently cutting rates while the BoE maintains a cautious stance. The ECB’s wage tracker indicating stable negotiated wage pressures reinforces the mild easing bias.
- Watch for any signals from BoE speakers ahead of tomorrow’s rate decision; the vote split (8-1) shows dissent.
- Risk of a downside surprise in UK services inflation could tilt the BoE dovish and pressure GBP.
Bias into NY: Cautiously bearish EUR/GBP, targeting a retest of 0.8600. The BoE’s reluctance to commit to a cut path, coupled with sticky UK services CPI, should continue to support Sterling; weaker DXY (-0.40% to 97.79) could provide some temporary respite for the Euro.