EUR/GBP holds near 0.8343 as the British Pound maintains an edge over the Euro, with markets awaiting key GDP data from the UK and Eurozone later this week.
The BoE voted 8-1 to hike 25 bps to 4.00% at its November meeting, its first hike since 2023, with Governor Bailey citing a strong case for another hike if the US-Iran conflict is unresolved. UK CPI at 3.5% and an MPC forecast of around 5% by mid-2027 support a hawkish bias, keeping the Pound firm against the Euro.
Traders anticipate another ECB hike in December after the deposit rate was held at 2.50% in October, but these expectations offer little support to the Euro because concerns over France's public finances weigh on the currency. Eurozone inflation at 4.0% YoY in October argues for tightening, yet France's fiscal woes cap the upside.
The cross trades sideways around 0.8343, holding a narrow range near levels last seen in April 2025, with the Pound keeping the upper hand. BoE hiked 25 bps to 4.00% while the ECB held at 2.50%, a policy gap favouring GBP, but UK Q3 GDP on Thursday and Eurozone GDP on Friday could break the range either way.
The EUR/GBP pair remains rangebound near 0.8343 as traders weigh divergent central bank policies. While the Bank of England recently hiked rates to 4.00% with a hawkish bias, the Euro faces pressure from concerns over French public finances despite expectations of an ECB rate hike in December. Investors are now focused on the upcoming UK Q3 GDP release on Thursday and Eurozone GDP figures on Friday for further direction.
The Bank of England has begun raising rates toward 4.00% while the ECB deposit rate sits at 2.50%, and Governor Bailey signalled a strong case for another hike, giving the Pound the upper hand against the Euro.
Traders expect an ECB hike in December, but the article notes this offers little support to the Euro against the Pound as worries over France's public finances weigh on the single currency.
The cross is holding a narrow range near 0.8343 because traders are already weighing both central banks' outlooks, and expected ECB tightening plus worries over France's public finances largely offset each other ahead of this week's GDP data.