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Euro rebounds against British pound as ECB-BoE rate paths diverge

EUR/GBP was around 0.8587 after earlier slipping to an intraday low near 0.8570.

Reported · Written up by our desk · Major Pairs

EUR/GBP rebounded on Tuesday after falling to a six-day low, with the cross trading around 0.8587 after an intraday low near 0.8570, according to FXStreet.

The move reflects expectations that the Bank of England will leave its Bank Rate unchanged at 3.75% on September 17, while markets widely expect the European Central Bank to raise its deposit rate by 25 basis points to 2.50% on Thursday.

FXStreet also pointed to Bank of England Governor Andrew Bailey’s cautious remarks, and said they have added to GBP weakness versus most major peers.

On the UK side, the outlet cited fiscal concerns, including commentary from UK Chancellor John Healey about a growing burden from high government borrowing costs, plus Rabobank’s view that the pound could slip on any perceived dovish shift from the BoE.

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