EUR/GBP Range-Bound as ECB and BoE Diverge on Monetary Policy

The EUR/GBP exchange rate has been stuck in a narrow trading range due to opposing monetary policy expectations from the European Central Bank (ECB) and the Bank of England (BoE). The Euro has found some support from resilient eurozone inflation data, but the Pound is being underpinned by expectations that the BoE will keep interest rates higher for longer. This tug-of-war has kept the exchange rate range-bound, with traders reluctant to place large directional bets ahead of key economic releases and central bank meetings.

For the Euro, the focus remains on the ECB's fight against inflation. Recent data showed that inflation in the eurozone remains sticky, which could prompt the ECB to maintain its restrictive policy stance. However, concerns about economic growth in the bloc, particularly in Germany, are capping the Euro's upside.

Traders are closely monitoring upcoming economic data from both the eurozone and the UK, including GDP figures, inflation prints, and central bank speeches. A surprise in either direction could break the pair out of its current range.