Home Forex News EUR/GBP Rallies from 1-Week Lows On Pound Weakness

EUR/GBP Rallies from 1-Week Lows On Pound Weakness

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  • Brexit Optimism
  • BOE Policy Report
  • German Stimulus Package

EUR/GBP was up by more than 0.2%, Thursday Morning, as the British Pound weakened ahead of a key report. The Pound has remained resilient in recent sessions amidst hopes of ongoing BREXIT talks between the U.K and the EU.

Sterling Resurgence

The Euro has registered a moderate pull back against the Sterling, following a recent pullback from three-month highs. Likewise, the pair has remained range-bound as both the Pound and the Euro remained vulnerable to weak economic data amidst the COVID-19 pandemic.

The British Pound continues to trade in a narrow range as traders await the Bank of England policy meeting outcome. With the BOC expected to expand the quantitative easing to revitalize the struggling U.K economy, bullish momentum appears to be slowly building.

The Pound has also regained some ground on Eurozone leaders and the U.K intensifying talks to sort out the BREXIT stalemate. Prime Minister Boris Johnson, affirming an agreement could be reached in July, has helped ease fears of hard Brexit conversely the strengthened Pound.

The Eurozone ramping up stimulus plans to revitalize the embattled economy has curtailed GBP gains against the Euro. Germany has been the most aggressive on the stimulus policy front, having already raised a debt on a massive scale to finance the coronavirus stimulus package.

The German government has already sold $4.6 billion worth of debt maturing in 10 years. In addition, the country’s finance ministry is planning to increase new borrowing by €62.5 billion to €218.5 billion.

EUR/GBP Outlook

Looking ahead, the focus will be on Bank of England as it releases its monthly policy report. Traders wait to see if the central bank will further cut the interest rate in a bid to cushion the struggling economy in the wake of the COVID-19 pandemic. Traders also wait to see the kind of quantitative easing measures the BOE will turn to stimulate the economy.

The BOC policy report should have an impact on traders sentiments on the Pound, conversely, influence EUR/GBP price action.

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