FXOpen Trader
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EUR/GBP: Trendline Support or Breakdown to New Lows?
EUR/GBP has slid to its weakest level in a year, as the two currencies continue to follow increasingly divergent paths. The ECB's June hike—its first since 2023—was meant to signal renewed hawkishness, but the very next inflation print undercut that narrative: price growth cooled from 3.2% to 2.8%, enough for markets to now assign an 88% probability that policymakers will simply hold steady at their July 23 meeting. In other words, the euro's tightening story may already be running out of road.
The pound, by contrast, is benefiting from a rare double tailwind. Domestically, much of the political uncertainty that had weighed on sterling appears to be fading as investors look past recent leadership turmoil, while falling mortgage rates and a sharp drop in diesel prices are easing cost-of-living pressure at home. On the policy side, traders are increasingly convinced the Bank of England still has room to hike before year-end, with odds now sitting near 76%—a stark contrast to the ECB's apparent pause.
Put simply, the euro's hawkish window looks to be closing, while the pound is gaining traction on two fronts at once. That divergence is exactly what's driving EUR/GBP toward these lows—and it's worth asking how much further it can run.
TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG
Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
EUR/GBP has slid to its weakest level in a year, as the two currencies continue to follow increasingly divergent paths. The ECB's June hike—its first since 2023—was meant to signal renewed hawkishness, but the very next inflation print undercut that narrative: price growth cooled from 3.2% to 2.8%, enough for markets to now assign an 88% probability that policymakers will simply hold steady at their July 23 meeting. In other words, the euro's tightening story may already be running out of road.
The pound, by contrast, is benefiting from a rare double tailwind. Domestically, much of the political uncertainty that had weighed on sterling appears to be fading as investors look past recent leadership turmoil, while falling mortgage rates and a sharp drop in diesel prices are easing cost-of-living pressure at home. On the policy side, traders are increasingly convinced the Bank of England still has room to hike before year-end, with odds now sitting near 76%—a stark contrast to the ECB's apparent pause.
Put simply, the euro's hawkish window looks to be closing, while the pound is gaining traction on two fronts at once. That divergence is exactly what's driving EUR/GBP toward these lows—and it's worth asking how much further it can run.
TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG
Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
