The EUR/GBP exchange rate climbed for the fourth consecutive day, buoyed by expectations of further Bank of England (BoE) interest rate cuts in 2025. The BoE's decision to lower rates by 25 basis points and Governor Andrew Bailey's indication of potential future cuts fueled the pound's weakness. However, the pair's upward momentum could be capped by rising risks of US President Donald Trump imposing tariffs on the EU due to the ongoing trade imbalance.
EUR/GBP gains ground due to the increased likelihood of more BoE rate cuts in 2025. BoE’s Bailey signaled additional rate cuts with the market expecting two or three more cuts throughout the year. Trump described the trade imbalance between the US and the EU as an “atrocity,” insisting that tariffs “will definitely happen.” EUR/GBP continues its upward trajectory for the fourth consecutive day, trading around 0.8350 during Friday’s Asian session.
On Wednesday, ECB policymaker and Bank of Portugal Governor Mario Centeno told Reuters that maintaining a downward trajectory for interest rates is pretty clear. While Centeno did not specify the exact pace of policy easing, he emphasized the need to reach a neutral rate sooner rather than later. Tariffs FAQs What are tariffs? Tariffs are customs duties levied on certain merchandise imports or a category of products.
EUR/GBP BOE Interest Rate Cuts Tariffs Trade Imbalance
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