The EUR/GBP currency pair continues its downward slide, pressured by concerns over potential US tariffs on EU goods and the European Central Bank's dovish monetary policy. Traders await the Bank of England's interest rate decision for further direction.
The EUR/GBP currency pair continued its downward trajectory for the third consecutive day on Tuesday, trading around the 0.8300 mark, just above a near one-month low. Worries about potential trade tariffs imposed by US President Donald Trump on goods sourced from the Euro pean Union, coupled with the Euro pean Central Bank's ( ECB ) dovish stance, contributed to the Euro 's relative weakness.
Despite a slight upward movement during the Asian session, the pair ultimately succumbed to bearish pressures.The ECB's recent decision to lower borrowing costs by 25 basis points (bps) last Thursday, in line with expectations, and its indication of potential further rate cuts by the end of the year, fueled concerns about the Euro's future prospects. This dovish stance, coupled with the lingering threat of Trump's tariffs, overshadowed a positive development: a rise in the Eurozone Harmonized Index of Consumer Prices (HICP) at an annual rate of 2.5% in January.However, traders might exercise caution before making aggressive bets, opting to wait for the Bank of England (BoE) meeting scheduled for Thursday. This upcoming event could significantly influence the direction of the EUR/GBP cross. Nevertheless, the prevailing factors point towards the continuation of the downtrend that has persisted for nearly two weeks. Any attempts at recovery are likely to be viewed as selling opportunities and are expected to face an upper limit. In the absence of substantial macroeconomic data on Tuesday, traders may choose to adopt a wait-and-see approach ahead of the crucial BoE meeting
EUR/GBP Euro Pound Sterling Trade War Tariffs ECB Boe Interest Rates
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