British Pound (GBP) Forecast: EUR/GBP at the Mercy of ECB

[MongiIG]

Jun 9, 2022 | DailyFX
Warren Venketas, Analyst

POUND STERLING TALKING POINTS

• ECB rate decision skewed towards more aggressive path.
• Attention on rising wedge pattern.

EUR/GBP FUNDAMENTAL BACKDROP

EUR/GBP looks ahead to the ECB rate decision (see calendar below) for guidance. Markets have been expectant of a more hawkish ECB by way of possibly opening up the possibility for a 50bps rate in in their next meeting in July. Should this come to fruition we would likely see the euro strengthen while an ECB that maintains its current stance will weigh on the EUR across the board. This hawkish prospect stemmed from strong eurozone GDP data along with the persistent long-term inflationary pressure.

 

What are your views on ECB decision rate and the GBP?