Tuesday sees EUR/GBP turn positive for the fifth day in a row, but there is no follow-through.
Concerns about stagflation and the UK economy still affect the GBP and help the cross.
For short-term opportunities, traders anticipate BoE's Breeden's scheduled speech.
On Tuesday, the EUR/GBP cross draws some dip-buyers and holds back the slight decline from the 200-day SMA, or a two-and-a-half-month high, the day before. As the European session begins, spot prices turn positive for the fifth day in a row, with bulls hoping to build on the intraday move-up above the 0.8400 level.
The risk of stagflation, which is a confluence of high inflation and slow economic growth, has caused the British pound (GBP) to continue its relative underperformance. Additionally, worries about the UK's financial status in the face of rising borrowing costs damages the GBP's reputation and serves as a major tailwind for the EUR/GBP exchange rate.
The European Central Bank's (ECB) dovish stance and worries about the struggling Eurozone economy, however, prevent the shared currency from gaining any significant positive momentum. In fact, the ECB left the door open for additional easing in 2025 when it lowered interest rates for the fourth time in December. As a result, bulls are being prevented from making new wagers on the EUR/GBP cross.
Going forward, neither the UK nor the Eurozone are scheduled to release any pertinent economic data that could influence markets on Tuesday. Therefore, the attention will be fixed on Sarah Breeden, the deputy governor of the Bank of England (BoE), as she is scheduled to give a speech that will impact the GBP and give the EUR/GBP cross a significant boost ahead of Wednesday's UK consumer inflation data.
Concerns about stagflation and the UK economy still affect the GBP and help the cross.
For short-term opportunities, traders anticipate BoE's Breeden's scheduled speech.
On Tuesday, the EUR/GBP cross draws some dip-buyers and holds back the slight decline from the 200-day SMA, or a two-and-a-half-month high, the day before. As the European session begins, spot prices turn positive for the fifth day in a row, with bulls hoping to build on the intraday move-up above the 0.8400 level.
The risk of stagflation, which is a confluence of high inflation and slow economic growth, has caused the British pound (GBP) to continue its relative underperformance. Additionally, worries about the UK's financial status in the face of rising borrowing costs damages the GBP's reputation and serves as a major tailwind for the EUR/GBP exchange rate.
The European Central Bank's (ECB) dovish stance and worries about the struggling Eurozone economy, however, prevent the shared currency from gaining any significant positive momentum. In fact, the ECB left the door open for additional easing in 2025 when it lowered interest rates for the fourth time in December. As a result, bulls are being prevented from making new wagers on the EUR/GBP cross.
Going forward, neither the UK nor the Eurozone are scheduled to release any pertinent economic data that could influence markets on Tuesday. Therefore, the attention will be fixed on Sarah Breeden, the deputy governor of the Bank of England (BoE), as she is scheduled to give a speech that will impact the GBP and give the EUR/GBP cross a significant boost ahead of Wednesday's UK consumer inflation data.
