EUR/GBP is trading with mild losses near 0.8740 in early European hours on Wednesday, pressured by a firmer Pound Sterling (GBP) after hawkish commentary from Bank of England (BoE) policymakers. Market attention now turns to BoE Governor Andrew Bailey’s speech later in the day, followed by Friday’s UK monthly GDP release.
BoE’s hawkish signals support sterling
BoE Deputy Governor Clare Lombardelli said on Tuesday that she remains concerned about upside risks to UK inflation and argued that the central bank should proceed more cautiously as it nears the end of its rate-cutting cycle. Her remarks boosted the GBP and placed downward pressure on EUR/GBP in the near term.
Markets still expect a December BoE rate cut
Despite Lombardelli’s hawkish tone, markets continue to anticipate a 25 bps rate cut to 3.75% at next week’s BoE meeting. According to a Reuters poll, traders are pricing in roughly an 88% probability of such a move after recent data pointed to easing inflation pressures in the UK. This expectation could limit the Pound’s upside if reinforced in upcoming speeches or data releases.
ECB sentiment offers mild support to the Euro
On the Eurozone side, rising speculation that the European Central Bank (ECB) has concluded its rate-cutting cycle is helping cushion the Euro. ECB President Christine Lagarde recently reiterated that policymakers are not pre-committed to a specific policy path and will continue to make decisions on a meeting-by-meeting basis. She emphasized that the Eurozone economy is in a “good place,” with inflation nearing the 2% target – a message that underscores the ECB’s cautious but steady stance.
Overall, while hawkish BoE commentary is currently weighing on EUR/GBP, both upcoming UK data and central-bank communication will be key drivers for the pair heading into next week’s policy decisions.
Ready to start trading Forex? Join iXBroker today and kick-start your trading journey now!
