Key Moments
- EUR/GBP trades around 0.8357, up 0.10%, supported by weaker Oil prices and improved Eurozone sentiment.
- ECB and BoE officials keep the door open for potential December rate hikes as inflation risks remain in focus.
- Traders look to upcoming UK Q3 GDP and revised Eurozone GDP figures later this week for fresh direction.
Euro Finds Support Against Pound as Oil Retreats
EUR/GBP is trading with a modest upside bias on Tuesday, with the pair hovering near 0.8357, a gain of 0.10% on the session. The cross remains confined within a range close to levels last seen in April 2025, as the Euro (EUR) gains ground against the Pound Sterling (GBP) and most other major currencies.
The Euro’s outperformance is being helped by renewed pressure on crude Oil prices. West Texas Intermediate (WTI) has fallen toward $83 per barrel, its lowest level since August 31, and is down about 16% so far this month. Expectations for progress in diplomatic talks between the US and Iran have reduced fears of further strikes, weighing on the Oil market. Softer energy prices are providing some relief for the Eurozone, which is heavily dependent on imported energy.
Improved Risk Sentiment Eases Pressure on French Debt
The more constructive tone in broader markets is also helping Eurozone assets. French government bonds have seen some respite, with the spread between French and German 10-year yields narrowing to around 145 basis points from roughly 175 basis points at its October peak. This tightening spread is offering additional support to the Euro.
However, the currency still faces headwinds from ongoing political uncertainty and budgetary challenges in France, which remain a potential source of risk for Euro-area assets.
ECB Signals Possible December Hike if Data Hold Steady
Attention is firmly on upcoming central bank decisions, with policymakers’ latest comments keeping December rate expectations in play. European Central Bank (ECB) Chief Economist Philip Lane told Bloomberg Television it “would be prudent indeed to hike” in December if the data stay broadly unchanged. He expects inflation to end the year “a little bit” above 4%, and anticipates that both core and food inflation are likely to rise.
These remarks underline a still-hawkish stance at the ECB, reinforcing the possibility of further tightening if incoming data do not show a material improvement in the inflation outlook.
BoE Officials Keep December Move on the Table
In the UK, Bank of England (BoE) Deputy Governor Clare Lombardelli indicated that a December rate increase remains a live option, stating that she would not rule out such a move and adding that “equally, I don’t have enough information just yet.”
At its November meeting, the BoE delivered an 8-1 vote in favor of raising the benchmark rate by 25 basis points to 4.00%. External Monetary Policy Committee (MPC) member Catherine Mann backed a larger 50 basis point hike. This decision represented the first rate increase since 2023, as the central bank seeks to respond to inflationary pressures amplified by higher energy costs linked to the war in the Middle East.
Analysts at ABN Amro emphasized that the BoE’s latest communication retains a clearly hawkish tone, noting that the MPC “projected inflation to reach around 5% by mid-2027” and explicitly “signalled another increase unless the Middle East conflict is resolved.” These projections continue to shape market expectations for additional tightening.
Key Data Ahead: UK and Eurozone Growth Figures
On the macroeconomic front, traders are awaiting fresh growth data to refine their views on both currencies. The UK is scheduled to publish its first estimate of third-quarter Gross Domestic Product (GDP) on Thursday. This will be followed by updated Eurozone GDP figures on Friday.
These releases are likely to be closely scrutinized for signs of diverging economic momentum between the UK and the Euro area, and could influence positioning in EUR/GBP as well as expectations for upcoming policy decisions by the ECB and BoE.
US Dollar Performance Against Major Currencies
The table below summarizes the percentage moves of the US Dollar (USD) versus a basket of major currencies today. According to the data, the US Dollar shows particular strength against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | – | 0.05% | 0.13% | 0.17% | 0.07% | 0.25% | 0.04% | 0.20% |
| EUR | -0.05% | – | 0.08% | 0.12% | 0.03% | 0.20% | 0.00% | 0.15% |
| GBP | -0.13% | -0.08% | – | 0.04% | -0.04% | 0.12% | -0.09% | 0.07% |
| JPY | -0.17% | -0.12% | -0.04% | – | -0.10% | 0.07% | -0.14% | 0.02% |
| CAD | -0.07% | -0.03% | 0.04% | 0.10% | – | 0.18% | -0.04% | 0.12% |
| AUD | -0.25% | -0.20% | -0.12% | -0.07% | -0.18% | – | -0.21% | -0.05% |
| NZD | -0.04% | -0.00% | 0.09% | 0.14% | 0.04% | 0.21% | – | 0.16% |
| CHF | -0.20% | -0.15% | -0.07% | -0.02% | -0.12% | 0.05% | -0.16% | – |
The heat map is read by selecting the base currency from the left-hand column and the quote currency from the top row. For instance, choosing the US Dollar from the left and moving horizontally to the Japanese Yen cell shows the percentage change for USD (base)/JPY (quote).
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