News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Forex Trading: EURGBP Outlook Weighed By BoE, ECB Policy

Forex Trading: EURGBP Outlook Weighed By BoE, ECB Policy

David Song, Strategist

We’re seeing the EURGBP retrace the decline from the December high (0.8224) ahead of the European Central Bank (ECB) and Bank of England (BoE) interest rate decisions, but the short-term rebound may quickly fizzle out amid the deviation in the policy outlook. Both the ECB and BoE are widely expected to maintain its current policy in January, but we may see the Governing Council sound more dovish this time around as the euro-area faces a deepening recession. In contrast, the budding recovery in the U.K. may encourage the BoE to adopt a more hawkish tone for monetary policy, and it seems as though the central bank is moving away from its easing cycle as inflation holds above the 2% target. As the EURGBP struggles to hold above the 78.6% Fibonacci retracement from 2008 low to high around 0.8140-50, the pair looks poised to threaten the upward trending channel from back in July, and we may see a key reversal in the euro-pound as market participants weigh the outlook for monetary policy.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES