EUR/GBP steadies around 0.8760 level amid uncertainECB’s rate hike trajectory


  • EUR/GBP trades listlessly on ECB’s blurred rate hike path amid global banking turmoil.
  • Liquidity crisis and policy uncertainty left Euro with mixed reactions.
  • Market awaits UK CPI and BoE Interest Rate decision next week. 

EUR/GBP is currently hovering around the 0.8760 mark, as the European Central Bank (ECB) portrayed a blurred picture around the future rate hike path. The market participant was assuming that the ECB would not hike by 50 basis points (bps) after the recent turbulence in the  banking sector globally.

Following the US Silicon Valley Bank (SVB) fallout, the market has witnessed many small to large banks falling into liquidity traps emerging from higher borrowing costs across the world. Credit Suisse was the first European bank to face a liquidity crunch this week, although the Swiss National Bank (SNB) intervened with some rescue plans.

Therefore, the expectation prior to the ECB rate decision on Thursday was low for a 50 bps hike. Despite that, the ECB raised the rate by 50 bps. Later on, some backdoor sources suggest that the driving force behind the 50 bps rate was after SNB threw a lifeline to Credit Suisse. Adding to this, the ECB feared ditching a 50 basis point hike would panic investors. Even though some policymakers discussed no change in the rate hike, there was no discussion on a 25 bps hike.

Highlighting the policy statement from the ECB, President Christine Lagarde said underlined price pressures remain strong and wage pressures are strengthening. ECB's Lagarde has poured cold water on any pre-determined rate hike expectation by switching to a data-dependent mode. The liquidity crisis and policy uncertainty from ECB got the Euro mixed action across the board.

Therefore, it has thrown the market expectation for future rate hikes to the sideline, waiting for more data releases to frame any expectations for May's ECB meeting. Subsequently, the market expectation of a 25 bps hike for the May meeting is 50-50. For the Pound Sterling, it is important to watch the Consumer Price Index (CPI) data released from the UK, due next Wednesday, prior to the BoE Interest Rate Decision on Thursday.

Levels to watch

EUR/GBP

Overview
Today last price 0.8763
Today Daily Change 0.0000
Today Daily Change % 0.00
Today daily open 0.8763
 
Trends
Daily SMA20 0.8839
Daily SMA50 0.8838
Daily SMA100 0.877
Daily SMA200 0.8688
 
Levels
Previous Daily High 0.8819
Previous Daily Low 0.8748
Previous Weekly High 0.8925
Previous Weekly Low 0.8821
Previous Monthly High 0.8979
Previous Monthly Low 0.8755
Daily Fibonacci 38.2% 0.8775
Daily Fibonacci 61.8% 0.8792
Daily Pivot Point S1 0.8734
Daily Pivot Point S2 0.8705
Daily Pivot Point S3 0.8662
Daily Pivot Point R1 0.8805
Daily Pivot Point R2 0.8848
Daily Pivot Point R3 0.8877

 

 

Share: Feed news

Recommended content


Recommended content

Editors’ Picks

EUR/USD declines below 1.0850 as USD recovers

EUR/USD declines below 1.0850 as USD recovers

Following Tuesday's choppy action, EUR/USD came under modest bearish pressure and declined below 1.0850 on Wednesday. The recovery seen in US Treasury bond yields and the cautious market mood support the USD ahead of FOMC Minutes and weigh on the pair.

EUR/USD News

GBP/USD retreats below 1.2750 following UK CPI-inspired rally

GBP/USD retreats below 1.2750 following UK CPI-inspired rally

GBP/USD retreated below 1.2750 after rallying to a two-month-high above 1.2760 after the data from the UK showed that inflation was higher than expected in April. The US Dollar stays resilient against its rivals on Wednesday as markets turn cautious ahead of the FOMC Minutes. 

GBP/USD News

Gold drops below $2,400, pressured by rising US yields

Gold drops below $2,400, pressured by rising US yields

Gold price turned south on Wednesday and dropped below $2,400. As markets wait for the Federal Reserve to release the minutes of the April 30-May 1 policy meeting, the benchmark 10-year US Treasury bond yield pushes higher and weighs on XAU/USD.

Gold News

Shiba Inu price buy signal hints 25% upswing on the horizon for SHIB holders Premium

Shiba Inu price buy signal hints 25% upswing on the horizon for SHIB holders

Shiba Inu (SHIB) price continues its struggle above a key hurdle. This development comes as SHIB, an ERC-20 meme coin, reacts to the Ethereum spot ETF approval news.

Read more

Fed Minutes Preview: Markets to focus on comments regarding the inflation outlook

Fed Minutes Preview: Markets to focus on comments regarding the inflation outlook

The Fed left unchanged its monetary policy settings following the April 30-May 1 policy meeting as expected. In its policy statement, the US central bank said that there has recently been a lack of further progress toward the 2% inflation target.

Read more

Forex MAJORS

Cryptocurrencies

Signatures