EUR/GBP experiences losses post ECB rate decision

The EUR/GBP pair is standing at 08536 at the time of writing, down -0.20%, earlier on the day it was at almost 0.8530, down by 0.30%. The ECB held rates steady as expected. Christine Lagarde refrained from commenting on the timing of the ECB rate cuts. Monetary policy divergences are giving the Sterling traction over the Euro.

On Thursday’s session, the EUR/GBP pair was observed at a trading level of 0.8530, seeing 0.30% loss. Bears seem to be gaining ground, as the daily chart manifests a bearish outlook. The four-hour chart extends this negative forecast, reflecting an increased dominance of sellers in the market’s current state.

In this regard, the European Central Bank’s conservative attitude to interest rate cuts—with only subtle indications of doing so—caused the EUR/GBP to drop, and as of right now, markets do not anticipate a rate decrease until June. The Bank of England, on the other hand, sticks to a stable policy, and the markets anticipate less easing than the ECB (125 bps) in 2024, which supports the strength of the GBP.

As a result, the cross is being pushed lower by both the BoE’s consistent policy and the ECB’s possible easing. The British economy’s resilience to the BoE’s monetary policy, which is forcing the bank to postpone rate decreases, is another reason supporting the pound.