EUR/GBP Goes Above 0.8650 as Rate Cut Hopes Rise in the UK
The EUR/GBP currency pair moved higher on Friday and went above the 0.8650 mark. This means the Euro gained strength against the British Pound (GBP).
The main reason for this move is the rising chances of a Bank of England (BoE) interest rate cut. The UK unemployment rate recently went up to 4.7%, which is the highest level in four years. This weak job data made traders think the BoE may cut rates soon—possibly in August.
As a result, traders in the forex market are now more confident about a rate cut next month, with chances going up to around 89%.
At the same time, the European Central Bank (ECB) is expected to wait until December before making any rate cuts. This gives support to the Euro, helping it rise against the Pound Sterling.
Traders are now watching for upcoming data from Germany and the Eurozone, including the Producer Price Index (PPI) and current account numbers. These reports could affect where EUR/GBP moves next.
Impact:
If UK economic data stays weak, EUR/GBP might go up more. Delayed ECB cuts could keep the Euro strong. New data may shift market direction either way.