As the BoE’s decision and the ECB’s Lagarde speech loom, EUR/GBP remains under pressure around the mid-0.8700s.

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Despite recent inaction, EUR/GBP exhibits a four-day downtrend.

The housing market and optimism regarding the UK’s output compete with the hawkish ECB talks.

The sluggish moves of the pair are strengthened by the market’s failure to maintain the week-start optimism.

Key UK data, a speech from Lagarde of the ECB, and the BoE Monetary Policy Meeting all aimed for clear directions.


As traders await this week’s key catalysts with mixed feelings early on Monday, EUR/GBP holds lower ground near 0.8760, erasing the three-month low of the previous week. Despite this, the cross-currency pair has fallen for the fourth day in a row as of press time.

The EUR/GBP pair remained on the bears’ radar as market sentiment improved earlier in the day. The headlines suggesting the UBS takeover of the troubled Credit Suisse to support the recovery in sentiment joined the news about the coordinated efforts of the major central banks to fuel the market’s liquidity as one of the key catalysts.

On the other hand, the specifics of the UBS-Credit Suisse deal indicate losses for Credit Suisse AT1 bondholders, which challenged EUR/GBP pair sellers and questioned weak-start optimism.

It is important to note that the EUR/GBP bears are also being questioned by recent headlines in the Financial Times (FT) that suggest even bets on further rate hikes by the Bank of England (BoE). The hawkish statements made by officials at the European Central Bank (ECB) may be speaking the same language.

According to the Property portal Rightmove Survey, “The average price of homes coming on the market in Britain stabilized in March and activity is picking up towards more normal pre-pandemic levels after last year’s “mini-budget” upheaval,” headlines from Reuters previously favored the British pound (GBP).

According to Reuters, Trade body Make UK and accounting firm BDO reported that their quarterly gauge of manufacturing output increased from +5 to +21 in the first quarter. This was the highest balance level since the beginning of last year, when it increased to +24. According to the news, Britain’s manufacturing output rebounded in the first three months of 2023, which is consistent with other indicators of economic improvement. However, businesses anticipate that the sector will contract as inflationary pressures persist.

“The central bank hopes the Swiss-brokered rescue of Credit Suisse will restore calm in financial markets,” however, ECB President Christine Lagarde stated.

Multiple officials from the European Central Bank (ECB) crossed wires on Friday to defend the ECB’s hawkish monetary policy stance and to persuade markets of the stability of the bloc’s banks. First, Madis Muller, a member of the Governing Council, stated that “banking uncertainty complicates communication” and that the most recent inflation forecasts assume additional rate hikes. Francois Villeroy de Galhau, a member of the ECB Board, followed him and stated that European and French banks are “very solid.” Furthermore, Governing Council Member Gediminas imkus supported the hawkish bias by stating, “The terminal rate hasn’t been reached yet.” ECB policymaker Peter Kazimir stated that it is necessary to continue with rate hikes.

In the near future, EUR/GBP traders can be entertained by ECB President Lagarde, who is available for a speech. However, clear directions will be provided by the BoE monetary policy meeting details and this week’s UK inflation data.

About the author

Nafees Saifi // entrepreneur, author, trainer, and stocks and FX trader. 
Nafees Saifi is a professional FX trader from, India. Nafees has extensive experience trading commodities, bonds, and equity futures in the Asian, European, and US markets. Nafees holds a Bachelor of Finance and Economics degree and is focused heavily on Investment Finance and Quantitative Analysis.


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