GBP: Some risk premium is building – ING

FXStreet Insights Team FXStreet

EUR/GBP corrected lower on some EUR long squeezing yesterday, but seems to be lacking bearish momentum to trade back to 0.860, ING's FX analyst Francesco Pesole notes.

Risks mostly lie on the upside for EUR/GBP

"Our model has recorded two consecutive weeks of around 1% short-term overvaluation in EUR/GBP, which may well be a signal of markets starting to price in some GBP risk premium ahead of the UK budget. While the announcement is only on 26 November, it’s widely expected that many bits of the budget will be released to the media in the weeks before."

"We agree that risks mostly lie on the upside for EUR/GBP into year-end, also considering that our economists are still expecting a rate cut by the Bank of England this quarter, which is only 6bp in the price."

"This week, things have been quite quiet in the UK calendar. We heard from both sides of the hawkish-dovish BoE spectrum (Mann and Ramsden), while Governor Bailey is due to speak tomorrow. The lack of new data inputs makes it unlikely we'll see major deviations in off-meeting communication for now."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD nudges higher above 1.3350 despite Middle East turmoil

The GBP/USD pair rebounds to near 1.3385 during the Asian trading hours on Thursday. However, the potential upside for the major pair might be limited amid cooler-than-expected UK inflation data and escalating tensions in the Middle East. Traders will take more cues from the UK Retail Sales report, which is due later on Friday.

EUR/USD advances ahead of ECB policy decision

EUR/USD extends its gains for the second consecutive day, trading around 1.1410 during the Asian hours on Thursday. The pair gains ground as the Euro finds solid support ahead of the European Central Bank's upcoming interest rate decision.

Gold extends range play above $4,100 as inflation fears lift Fed hike bets and cap gains

Gold consolidates above the $4,100 round figure through the Asian session, and seems to have stalled its modest pullback from an over two-week high touched the previous day. Crude oil prices climb to a fresh high since June 11 amid a further escalation of tensions between the US and Iran, fueling inflation fears and bolstering US Fed interest rate hike expectations.

Hyperliquid, Robinhood could lead crypto’s next bull market as DeFi and TradFi converge

The next crypto bull market could be driven by the growing convergence between blockchain-based financial infrastructure and traditional finance, according to Bitwise CIO Matt Hougan. In a report published late Tuesday, Hougan argued that crypto may be showing early signs of a market bottom, with Bitcoin gaining 9% since July 1 even as the NASDAQ 100 declined 6%.

Ripple and Stellar await direction amid cautious sentiment

Ripple and Stellar trade cautiously as both tokens hover around key technical levels. XRP is testing resistance at its 50-day EMA, while XLM continues to consolidate around the $0.187 support zone. Meanwhile, mixed derivatives data with a slight bearish tilt suggests traders remain cautious, keeping the next directional move uncertain.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.