Categories: Markets

EUR / GBP consolidates above 0.8480 after rejection from 0.8520

EUR / GBP consolidates above 0.8480 after rejection from 0.8520
  • The euro returns to the 0.8480 zone after falling at 0.8520.
  • BoE rate hike expectations are supporting the pound.
  • EUR / GBP is trading above a key support area at 0.8471 / 49 – Commerzbank.

The euro has found support at the 0.8480 zone after a reversal from 0.8520 today. Generally speaking, the pair EUR/GBP he’s licking his wounds, holding on just below 0.8500 after losing nearly 2% over the previous two weeks.

BoE tightening expectations are supporting the British pound

The British pound has been fairly firm in October, supported by expectations that the Bank of England will lead the rest of the major central banks in raising interest rates after the COVID-19 crisis. Some market sources anticipate an interest rate hike early next year, with other hikes to follow, in an attempt to address inflationary pressures.

Furthermore, the euro remains on the defensive amid growing concerns over inflationary pressures and supply bottlenecks that frustrate the post-pandemic recovery. The macroeconomic agenda supported those fears on Tuesday, with the German ZEW economic sentiment index deteriorating for the fifth month in a row.

Technical levels