The EUR/GBP pair is trading higher for a second consecutive day, currently around 0.8710, up 0.20% on the day. The Euro is supported by the European Central Bank’s (ECB) steady policy stance, while the British Pound faces mixed signals amid domestic fiscal caution and hawkish central bank commentary.
ECB Reaffirms Restrictive Policy
The Euro gained ground after the ECB’s September Monetary Policy Meeting Accounts released Thursday showed broad consensus among policymakers that the current interest rates remain appropriate to achieve the 2% inflation target. Members emphasized that monetary policy is already sufficiently restrictive to absorb potential economic shocks, reinforcing confidence in the ECB’s wait-and-see approach.
French Political Uncertainty Limits Euro’s Upside
Despite the ECB’s supportive stance, political instability in France continues to pose risks for the Euro. The resignation of Prime Minister Sébastien Lecornu, following failed budget negotiations, has raised concerns about fiscal deadlock. President Emmanuel Macron is expected to appoint a new prime minister soon to avoid parliamentary dissolution, but markets remain cautious amid doubts over the government’s ability to pass key fiscal measures.
BoE’s Mann Signals Prolonged Tight Policy
In the UK, the Pound finds support from recent hawkish remarks by Bank of England (BoE) MPC member Catherine Mann, who argued for maintaining restrictive monetary policy to tackle persistent inflation. She described inflation as “stubborn” and warned that the growth outlook remains modest.
Additionally, UK Treasury Chief Secretary James Murray reinforced the government’s commitment to fiscal discipline, stating departments would be barred from using emergency funds for pay increases—aimed at preventing a wage–price spiral and maintaining economic stability.
Currency Heatmap: Euro Strongest Against Pound
According to the latest currency performance data, the Euro was the strongest against the British Pound today, gaining 0.20%. Here’s a quick snapshot of EUR’s performance:
| Currency | % Change vs EUR |
|---|---|
| USD | -0.10% |
| GBP | +0.20% |
| JPY | -0.02% |
| CAD | +0.09% |
| AUD | +0.18% |
| NZD | -0.02% |
| CHF | +0.03% |
