EURGBP Struggles Amidst ECB and BoE Policy Tensions

The EUR/GBP cross remains under pressure as buyers struggle to break above 0.8660, a former support level now acting as resistance.

Traders are weighing the policy paths of the European Central Bank (ECB) and the Bank of England (BoE), which have both kept interest rates relatively high due to inflation concerns.

The global energy crisis is adding pressure on policymakers, with ECB policymaker Peter Kazimir saying the latest rate hike was unavoidable due to rising energy prices.

ECB President Christine Lagarde noted that inflation risks remain, but growth prospects are also a concern. BoE Governor Andrew Bailey warned of potential policy tightening if the Middle East conflict persists and second-round inflation effects increase.