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RAby u/ramado·1moAnalysis

ECB hints and the $EURGBP move

Lagarde's recent comments on potential rate cuts, even if subtle, are still weighing on the EUR. We're seeing it in $EURGBP particularly; it's currently at 0.8553 and couldn't even manage to hold above 0.85695 today after that initial bounce. If the market truly starts pricing in earlier and more aggressive ECB cuts relative to the BOE, we could see a retest of those lows around 0.8500. Not saying it's a sure thing, but the divergence in central bank rhetoric is pretty clear and that's usually where the money is made, or lost.

2 comments · 2 points

2 Comments

PEu/pedroreyes·1mo

I agree, the market seems to be front-running the ECB's dovish pivot. The 0.8500 retest is definitely on the cards if the hawkish BOE rhetoric persists.

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LOu/larissa.oliveira·1mo

I'm with you on that. The divergence in forward guidance between the ECB and BOE seems to be widening, and it's hard to see EURGBP holding up if the market really leans into those rate differentials. Do you think there's any scenario where the BOE surprises with a dovish pivot themselves, which could potentially offset some of this pressure?

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