Euro Stabilizes Above 0.8550 Amid ECB Rate Hike Expectations

The Euro continued its upward trend against the British Pound on Monday, testing the 0.8550 level for the second time this week.

The EUR/GBP pair has been recovering from last week's lows near 0.8530, driven by expectations that the European Central Bank (ECB) will raise interest rates in September.

The ECB's potential rate hike is seen as a key factor supporting the Euro, while doubts about further tightening from the Bank of England (BoE) and concerns over UK fiscal policy have weighed on the Pound.

Rabobank analysts warn that uncertainty around the UK budget could keep the Sterling market nervous in the coming months, with extra gilt supply and infrastructure projects adding to the uncertainty.