Euro hits four-month high against pound on central banks decisions

Economies.com
2023-09-25 09:55AM UTC

Euro rose in European trade on Monday against the pound, extending gains for the fourth straight session and scaling a four-month high as the UK-European interest rate gap diminished following recent meetings by Bank of England and the ECB.

 

Analysts now expect BOE to cut interest rates earlier than the European Central Bank in 2024 to boost the economy. 

 

EUR/USD rose 0.15% to 0.8702, the highest since May, with a session-low at 0.8680, after rising 0.3% on Friday, the third profit in a row as Bank of England paused interest rate hikes. 

 

EUR/GBP rose 1% last week, the third weekly profit in a row, and the largest since June.

 

Such strong profits came following policy meetings by the ECB and BOE, with the ECB raising European rates by 25 basis points while the BOE held British rates unchanged. 

 

Interest Rate Gap 

 

Following the meetings, the rate gap between the euro zone and Britain stands at 75 basis points, the lowest since March 2022.

 

Such a gap is expected to continue unchanged this year as both central banks likely have reached neutral levels.

 

As for next year, the gap might shrink in favor of the ECB, as Bank of England is expected to cut interest rates early in 2024. 

 

The UK economy is heading for recession faster than Europe, which necessitates a faster response by policymakers. 

Forex and Currency News

Forex News

Forex

Dollar gives up one-week high ahead of Waller's remarks
2024-05-24 12:04PM UTC
Dollar fell in European trade on Friday against a basket of major rivals, giving up one-week highs ...
GBP/USD news

Forex

Sterling backs off two-month high after grim data
2024-05-24 07:44AM UTC
Sterling fell in European trade on Friday against a basket of major rivals, extending losses for ...
USD/JPY news

Forex

Yen hovers near three-week low under supervision of BOJ
2024-05-24 04:05AM UTC
Yen declined in Asian trade on Friday against a basket of major rivals, extending losses for the ...

Forex Technical Analysis

GBP USD Analysis

Forex

The GBPUSD forecast update 24-05-2024
2024-05-24 09:12AM UTC
GBPUSD Price Analysis Expected Scenario The GBPUSD price trades positively to attempt to ...
EUR USD Analysis

Forex

The EURUSD price forecast update - 24-05-2024
2024-05-24 09:12AM UTC
EURUSD Price Analysis Expected Scenario The EURUSD price shows some bullish bias to test ...
Technical Analysis

Forex

The GBPCAD continues to rise – Forecast today – 24-5-2024
2024-05-24 09:01AM UTC
GBPCAD Price Analysis Expected Scenario The GBPCAD price repeated the positive closings ...