Euro Dips Against Pound as Middle East Tensions and Oil Prices Rise
The Euro (EUR) lost ground against the British Pound (GBP) on Monday, hitting its lowest level in days at 0.8560. The EUR/GBP pair's decline is largely attributed to rising oil prices and tensions in the Middle East.
US President Donald Trump said he is 'semi-negotiating' with Tehran, while Iran announced an agreement with Oman to define new shipping lines through the Strait of Hormuz, but only if certain conditions are met. The uncertainty surrounding the conflict has pushed Brent Oil prices up 6.5% to around $83.00.
Analysts at Rabobank expect 'downside pressure' on the Pound as summer draws to a close due to nervousness ahead of the October budget and the prospect of steady policy from the Bank of England (BoE) this year. They recommend buying EUR/GBP on dips to 0.8550, with a break above 0.8588 potentially increasing upside potential.
Today's calendar is light, but Wednesday's Germany inflation figures and Thursday's UK GDP and Eurozone Industrial Production data are expected to shape the pair's near-term direction.