GBP/EUR Holds Above 1.165 on High UK Yields

The Pound to Euro exchange rate has continued to find support around 1.1680 due to high UK yields, which are among the highest in the G10.

According to MUFG, these rising yields are helping to support the pound despite concerns about the economic implications of the bond sell-off.

ING also commented on the Pound outlook, stating that they struggle to see EUR/GBP falling much further from here and that most risks appear on the upside in the coming weeks.

The Bank of England faces an increasingly difficult policy decision as markets price in at least four rate hikes by the middle of next year.