EUR/GBP Exchange Rate Stable Amid German Politics, Energy Prices

The EUR/GBP exchange rate has stabilized around 0.8575 following Monday's session, as the Eurozone struggles to regain momentum against Sterling.

German politics are casting a shadow on the single currency after Chancellor Friedrich Merz's party suffered a setback in regional elections, despite softer energy costs offering some relief.

Brent crude has slipped below $100 and is trading more than 8% under last week's highs, which tends to ease imported cost pressures for the Eurozone.

Rabobank expects the European Central Bank to lift the deposit facility rate by 25bp in December to 2.75%, describing this move as a response to an added energy shock rather than the start of a broader cycle.