EUR/GBP

Societe Generale’s Kenneth Broux notes EUR/GBP has extended its decline after breaking the July low and is now testing support at the lower end of a multi‑month descending channel near 0.8370/0.8355.

ING’s Chris Turner says sterling strength reflects both independent GBP gains and Euro weakness in EUR/GBP. Earlier concerns that Pound gains would fade have eased as markets gain confidence in the Bank of England’s tightening path, with ING expecting 25bp hikes in February and November.

The Euro (EUR) shows a mild bullish correction against the British Pound (GBP) on Thursday, following a more than 2.7% selloff from late September highs that had pushed the Relative Strength Index to heavily oversold levels in most timeframes.

The EUR/GBP cross weakens to near 0.8390 during the early European trading hours on Wednesday. The British Pound (GBP) attracts some buyers following hotter UK inflation data.

Societe Generale strategists highlight that United Kingdom (UK) unemployment has fallen to a 13‑month low and average earnings have ticked higher, reinforcing expectations for a Bank of England (BoE) rate hike to 4% in November.

MUFG’s Lee Hardman notes the Pound is strengthening, with EUR/GBP near its year-to-date low and GBP/USD above 1.3350, as stronger UK labour data show rising payrolled employment and private sector wage growth in line with Bank of England projections. He argues this supports expectations for BoE rate hikes and a lower EUR/GBP trading range between 0.8200 and 0.8400.