Euro rebounds against British Pound on diverging ECB-BoE interest rate paths
EUR/GBP rebounds on Tuesday after slipping to a six-day low earlier in the day. The recovery comes as the British Pound (GBP) weakens against most of its major peers following cautious remarks from Bank of England (BoE) Governor Andrew Bailey.
The Euro (EUR) has rebounded against the British Pound (GBP) as the ECB is expected to raise interest rates, while the BoE is expected to keep rates unchanged. This divergence in monetary policy is expected to favor the Euro, with EUR/GBP trading at around 0.8587. The Bank of England Governor Andrew Bailey's cautious remarks about inflation and recession risks have contributed to the Pound's weakness, with 65% of economists surveyed expecting no rate hike from the BoE in the near future.
Meanwhile, the European Central Bank is widely anticipated to increase its deposit rate by 25 basis points to 2.50% on Thursday, marking its second increase this year.
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