Euro trades flat vs British Pound as markets weigh ECB and BoE policy paths

Source Fxstreet
  • EUR/GBP stays under pressure after failing to reclaim the 0.8660 resistance area.
  • The ECB and BoE face a difficult balance between rising inflation and weaker growth.
  • Traders await UK GDP, German inflation and Retail Sales, followed by Eurozone inflation later this week.

EUR/GBP trades little changed on Tuesday, remaining under pressure after buyers failed to break above 0.8660, a former multi-month support level that is now acting as resistance. At the time of writing, the cross trades around 0.8578.

The subdued price action comes as traders assess Middle East risks and their potential impact on the monetary policy outlook in the Eurozone and the United Kingdom. Crude Oil prices remain elevated as the United States (US) and Iran struggle to make progress toward an agreement that could end the war and restore shipping through the Strait of Hormuz. Higher energy costs keep inflation risks tilted to the upside, forcing policymakers to maintain restrictive interest rates for longer.

The European Central Bank (ECB) has raised interest rates twice this year, lifting the deposit facility rate to 2.50%, while the Bank of England (BoE) has kept its Bank Rate unchanged at 3.75% for six consecutive meetings. Markets expect both central banks to raise borrowing costs in the coming months, although policymakers remain cautious as the Eurozone and the United Kingdom are vulnerable to higher energy costs, leaving them with the difficult task of controlling inflation without placing further pressure on economic growth.

On Tuesday, ECB policymaker Peter Kazimir said the latest rate hike “was unavoidable” and that energy prices “remain a key factor” for the policy outlook. Separately, ECB policymaker José Luis Escrivá said interest rates are “still not in restrictive territory.” He also warned that the global upward trend in long-term bond yields is becoming a concern and “can add pressure to interest rates.”

ECB President Christine Lagarde said on Monday, “We still see upside risks to inflation and downside risks to growth.” She noted, “We see higher inflation ahead but no signs yet that it is becoming embedded.” Lagarde said the ECB considers “a measured response as appropriate to keep inflation in check.”

Following the BoE’s September 17 decision, Governor Andrew Bailey said that if the Middle East conflict “persists for an extended period” and the risk of second-round inflation effects increases, “it is likely that policy may have to tighten.”

The focus now shifts to a busy week of central bank speakers and economic data. Traders will follow UK second-quarter Gross Domestic Product (GDP), German preliminary inflation and Retail Sales on Wednesday, before the Eurozone’s preliminary inflation report on Friday.

Pound Sterling Price Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Australian Dollar.

USD EUR GBP JPY CAD AUD NZD CHF
USD 0.23% 0.20% -0.03% 0.06% 0.42% 0.37% 0.18%
EUR -0.23% -0.04% -0.27% -0.19% 0.19% 0.14% -0.06%
GBP -0.20% 0.04% -0.23% -0.13% 0.21% 0.18% -0.03%
JPY 0.03% 0.27% 0.23% 0.10% 0.45% 0.40% 0.21%
CAD -0.06% 0.19% 0.13% -0.10% 0.35% 0.31% 0.12%
AUD -0.42% -0.19% -0.21% -0.45% -0.35% -0.04% -0.25%
NZD -0.37% -0.14% -0.18% -0.40% -0.31% 0.04% -0.19%
CHF -0.18% 0.06% 0.03% -0.21% -0.12% 0.25% 0.19%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold ends three-week slide at the $4,400 line — eight straight days of ETF inflows vs a 5% 10-year and a 100 dollarSpot gold closed Friday at $4,378.39, up 0.84% on the day and about 0.8% for the week — its first weekly gain in four weeks — with the intraday high of $4,399.67 leaving it 33 cents shy of the $4,400 line. Gold ETFs have now logged eight straight sessions of inflows, but with the 10-year back above 5% and the dollar index near 100, here is what decides whether this is a reversal or a bounce.
Author  Suzie
Sep 20, Sun
Spot gold closed Friday at $4,378.39, up 0.84% on the day and about 0.8% for the week — its first weekly gain in four weeks — with the intraday high of $4,399.67 leaving it 33 cents shy of the $4,400 line. Gold ETFs have now logged eight straight sessions of inflows, but with the 10-year back above 5% and the dollar index near 100, here is what decides whether this is a reversal or a bounce.
placeholder
October hike odds climb toward 60% as Goldman and BofA both flip — what Warsh's "dose of accommodation" really changedRate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
Author  Irene Q.
Sep 23, Wed
Rate futures now price roughly 55% to 62% for a 25bp hike at the October 27-28 FOMC, up from about 30% before Chair Warsh's post-meeting framing that the Fed is merely "removing some accommodation." Goldman Sachs has added an October hike to its forecast and Bank of America now sees moves in both October and December. Here is the repricing, the language behind it, and the two data points that decide it.
placeholder
Four jobs reports in five days: what JOLTS, ADP, claims and the September payrolls mean for the October Fed decisionThe US labour market faces its densest data week of the month. JOLTS job openings land Tuesday (7.2 million expected), ADP on Wednesday (70,000 expected), initial claims on Thursday and the September non-farm payrolls on Friday (100,000 expected, down from 162,000). Markets price a 64%-70% chance of another quarter-point Fed hike on October 28. The dollar index sits at 100.77 and the S&P 500 at 7,729.8.
Author  Mitrade
Yesterday 06: 33
The US labour market faces its densest data week of the month. JOLTS job openings land Tuesday (7.2 million expected), ADP on Wednesday (70,000 expected), initial claims on Thursday and the September non-farm payrolls on Friday (100,000 expected, down from 162,000). Markets price a 64%-70% chance of another quarter-point Fed hike on October 28. The dollar index sits at 100.77 and the S&P 500 at 7,729.8.
placeholder
Nvidia's $150 billion buyback landed — and the AI sector fell anyway. That's the signal worth tradingNvidia closed up 1.68% at $228.86 on 28 September after announcing a $150 billion share repurchase authorisation, the largest single corporate buyback on record, while the rest of the AI complex sold off: AMD -3.6%, Micron -2.6%, Meta -4.8% and the Philadelphia Semiconductor Index -1.61%. The divergence is not noise. Capital is rotating toward cash-flow certainty, not abandoning the AI theme. With Micron reporting after the close on 30 September, here is what the split means.
Author  Irene Q.
8 hours ago
Nvidia closed up 1.68% at $228.86 on 28 September after announcing a $150 billion share repurchase authorisation, the largest single corporate buyback on record, while the rest of the AI complex sold off: AMD -3.6%, Micron -2.6%, Meta -4.8% and the Philadelphia Semiconductor Index -1.61%. The divergence is not noise. Capital is rotating toward cash-flow certainty, not abandoning the AI theme. With Micron reporting after the close on 30 September, here is what the split means.
placeholder
The 30-year Treasury just hit a 22-year high — and the bond market is not pricing the Fed, it is pricing the deficitThe 30-year Treasury yield closed at 5.56% on 28 September, the highest since June 2004, while the 10-year reached 5.24% and the 20-year 5.60%. The curve has steepened roughly 30bp in eight sessions even as October hike odds sit at 70.3%. That gap is the story: the long end is repricing fiscal and inflation risk, not policy. With PCE on Wednesday and payrolls on Friday, here is what the long end is really saying.
Author  Irene Q.
7 hours ago
The 30-year Treasury yield closed at 5.56% on 28 September, the highest since June 2004, while the 10-year reached 5.24% and the 20-year 5.60%. The curve has steepened roughly 30bp in eight sessions even as October hike odds sit at 70.3%. That gap is the story: the long end is repricing fiscal and inflation risk, not policy. With PCE on Wednesday and payrolls on Friday, here is what the long end is really saying.
Related Instrument
goTop
quote