Snapshot: EUR/GBP is trading at 0.8618, down 0.05% on the day, as markets digest the Bank of England’s hawkish hold and brace for a wave of European PMI data. The key domestic driver remains the Bank of England’s policy stance, with two MPC members already voting for a hike, signalling persistent inflation concerns.
- The Bank of England’s 7-2 vote split, with two members pushing for a hike to 4%, underscores the hawkish bias and limits immediate downside for Sterling.
- Watch for the European Flash PMIs at 09:15 CET and 09:30 CET; a significant miss in German or French manufacturing could weigh on the Euro and support EUR/GBP.
Bias into NY: The setup favours a tight range into the New York open, with upside capped by the ECB’s tightening bias and downside supported by the BoE’s hawkish lean. We see potential for a squeeze higher towards 0.8630 if European PMIs disappoint significantly.