Select Language

EUR/GBP extends the rally above 0.8500 ahead of ZEW Economic Sentiment Surveys

Breaking news

EUR/GBP extends the rally above 0.8500 ahead of ZEW Economic Sentiment Surveys

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
update 2025.06.17 15:58
EUR/GBP extends the rally above 0.8500 ahead of ZEW Economic Sentiment Surveys

update 2025.06.17 15:58

  • EUR/GBP remains firm around 0.8520 in Tuesday's early European session.
  • Traders expect the ECB to pause its easing cycle this year. 
  • BoE rate cut bets continue to weigh on the Pound Sterling. 

The EUR/GBP cross extends its upside to near 0.8520 during the early European trading hours on Tuesday. The Euro (EUR) strengthens against the Pound Sterling (GBP) as traders expect the European Central Bank (ECB) to pause its easing cycle to assess the impact of new US tariffs. Later on Tuesday, the ZEW Survey from Germany and the Eurozone will be published. 

The hawkish tone from the ECB policymakers and rising expectation that the ECB will pause its easing cycle underpin the shared currency. ECB President Christine Lagarde said that rate reductions are coming to an end as the central bank is now "in a good position" to deal with prevailing uncertainties. 

Meanwhile, ECB Executive Board member Isabel Schnabel stated last week that the central bank's interest rate cutting campaign may soon be over, with inflation and the economy both on track. ECB Governing Council member Gediminas Simkus called for a pause in rate cuts due to "very big uncertainty" over US tariff policy. 

The Pound Sterling remains under selling pressure as traders raise their bets on interest rate reductions from the Bank of England (BoE) after a slew of weaker-than-expected UK economic data. The UK central bank is expected to cut the policy by 25 basis points (bps) in the third quarter and the fourth quarter, bringing down the bank rate to 3.75%, according to a large majority of economists polled by Reuters.

Pound Sterling FAQs

The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as 'Cable', which accounts for 11% of FX, GBP/JPY, or the 'Dragon' as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).

The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of "price stability" - a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.

Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.

Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.


Date

Created

 : 2025.06.17

Update

Last updated

 : 2025.06.17

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

USD/CNH: Chance of edging lower and testing 7.1720 - UOB Group

Softening underlying tone may lead to US Dollar (USD) edging lower and testing 7.1720 against Chinese Yuan (CNH). In the longer run, increasing momentum suggests USD may rise, but it is too early to expect 7.2000 to come into view, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
New
update2025.07.10 19:13

USD/CAD eases from 1.3700 Fed cuts hopes, higher Oil prices

The US Dollar retreated from two-week highs above 1.3700 on Wednesday, following the release of the FOMC m¡inutes and weighed by falling US Treasury yields.
New
update2025.07.10 19:07

Rising JGB yields keep Yen under pressure - BBH

USD/JPY eased off from this week's high above 147.00, while JPY continues to underperform against most major currencies, BBH FX analysts report.
New
update2025.07.10 19:03

USD/JPY: Scope to extend to 145.60 before stabilisation - UOB Group

Pullback in US Dollar (USD) has scope to extend to 145.60 before stabilisation is likely against Japanese Yen (JPY); strong support at 145.20 is unlikely to come under threat.
New
update2025.07.10 19:00

MXN: Inflation figures bring no relief - Commerzbank

Yesterday's Mexican inflation figures offered little relief: the seasonally adjusted core rate remained roughly consistent with the previous two months, Commerzbank's FX analyst Michael Pfister notes.
New
update2025.07.10 18:56

USD/JPY consolidates around 146.30 as investors seek current status of US-Japan trade talks

The USD/JPY pair trades sideways around 146.30 during the European trading session on Thursday. The pair consolidates as investors await fresh news regarding trade talks between the United States (US) and Japan.
New
update2025.07.10 18:54

NZD/USD: Price action indicates that further NZD weakness is likely - UOB Group

New Zealand Dollar (NZD) is expected to trade in a range against US Dollar (USD), most likely between 0.5980 and 0.6020. In the longer run, price action indicates that further NZD weakness is likely; the level to watch is 0.5950, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
New
update2025.07.10 18:43

RUB: Sanctions threat returns - Commerzbank

The likelihood of new, harsh sanctions on Russia is rising again: western leaders are abandoning hopes of meaningful diplomacy and reverting back to economic pressure, which had been the consensus strategy until US President Donald Trump took over.
New
update2025.07.10 18:33

Silver price today: Silver rises, according to FXStreet data

Silver prices (XAG/USD) rose on Thursday, according to FXStreet data.
New
update2025.07.10 18:31

AUD/USD: Momentum buildup is fading - UOB Group

Further consolidation in Australian Dollar (AUD) still seems likely against US Dollar (USD), probably between 0.6505 and 0.6555.
New
update2025.07.10 18:22

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel