The post EUR/GBP trades with caution near five-month low of 0.8620, ECB-BoE policy in focus appeared on BitcoinEthereumNews.com. The EUR/GBP pair trades vulnerablyThe post EUR/GBP trades with caution near five-month low of 0.8620, ECB-BoE policy in focus appeared on BitcoinEthereumNews.com. The EUR/GBP pair trades vulnerably

EUR/GBP trades with caution near five-month low of 0.8620, ECB-BoE policy in focus

4 min read

The EUR/GBP pair trades vulnerably near the five-month low of 0.8620 during the early European trading session on Tuesday. The cross has come under pressure ahead of monetary policy announcements by both the European Central Bank (ECB) and the Bank of England (BoE) on Thursday.

Investors expect both central banks to leave interest rates at their current levels. The ECB is seen holding its Deposit Facility Rate steady at 2% as inflation in the Eurozone region has remained close to the central bank’s 2% target.

Ahead of the ECB’s monetary policy announcement, investors will focus on the preliminary Eurozone Harmonized Index of Consumer Prices (HICP) data for January, which will be released on Wednesday. The headline HICP is expected to have risen at an annualized pace of 1.7%, slower than 1.9% in December. In the same period, the core HICP – which excludes volatile components like food, energy, alcohol, and tobacco – is estimated to have grown steadily by 2.3%.

Meanwhile, the BoE is seen leaving borrowing rates unchanged at 3.75% as the impact of previous interest rate cuts is yet to flow into the economy. Also, the United Kingdom (UK) central bank reduced interest rates by 25 basis points (bps) in the December policy meeting and reiterated that the monetary policy is on a “gradual downward path”.

A higher-than-projected increase in the UK Consumer Price Index (CPI) data for December is also expected to discourage BoE officials from delivering back-to-back interest rate cuts. In December, the headline inflation accelerated to 3.4% from 3.2% in November after slowing down for two months.

Central banks FAQs

Central Banks have a key mandate which is making sure that there is price stability in a country or region. Economies are constantly facing inflation or deflation when prices for certain goods and services are fluctuating. Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.

A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. Local banks will adjust their savings and lending rates accordingly, which in turn will make it either harder or easier for people to earn on their savings or for companies to take out loans and make investments in their businesses. When the central bank hikes interest rates substantially, this is called monetary tightening. When it is cutting its benchmark rate, it is called monetary easing.

A central bank is often politically independent. Members of the central bank policy board are passing through a series of panels and hearings before being appointed to a policy board seat. Each member in that board often has a certain conviction on how the central bank should control inflation and the subsequent monetary policy. Members that want a very loose monetary policy, with low rates and cheap lending, to boost the economy substantially while being content to see inflation slightly above 2%, are called ‘doves’. Members that rather want to see higher rates to reward savings and want to keep a lit on inflation at all time are called ‘hawks’ and will not rest until inflation is at or just below 2%.

Normally, there is a chairman or president who leads each meeting, needs to create a consensus between the hawks or doves and has his or her final say when it would come down to a vote split to avoid a 50-50 tie on whether the current policy should be adjusted. The chairman will deliver speeches which often can be followed live, where the current monetary stance and outlook is being communicated. A central bank will try to push forward its monetary policy without triggering violent swings in rates, equities, or its currency. All members of the central bank will channel their stance toward the markets in advance of a policy meeting event. A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. This is called the blackout period.

Source: https://www.fxstreet.com/news/eur-gbp-trades-with-caution-near-five-month-low-of-08620-ecb-boe-policy-in-focus-202602030600

Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

Gold Hits $3,700 as Sprott’s Wong Says Dollar’s Store-of-Value Crown May Slip

Gold Hits $3,700 as Sprott’s Wong Says Dollar’s Store-of-Value Crown May Slip

The post Gold Hits $3,700 as Sprott’s Wong Says Dollar’s Store-of-Value Crown May Slip appeared on BitcoinEthereumNews.com. Gold is strutting its way into record territory, smashing through $3,700 an ounce Wednesday morning, as Sprott Asset Management strategist Paul Wong says the yellow metal may finally snatch the dollar’s most coveted role: store of value. Wong Warns: Fiscal Dominance Puts U.S. Dollar on Notice, Gold on Top Gold prices eased slightly to $3,678.9 […] Source: https://news.bitcoin.com/gold-hits-3700-as-sprotts-wong-says-dollars-store-of-value-crown-may-slip/
Share
BitcoinEthereumNews2025/09/18 00:33
The Next Bitcoin Story Of 2025

The Next Bitcoin Story Of 2025

The post The Next Bitcoin Story Of 2025 appeared on BitcoinEthereumNews.com. Crypto News 18 September 2025 | 07:39 Bitcoin’s rise from obscure concept to a global asset is the playbook every serious investor pores over, and it still isn’t done writing; Bitcoin now trades above $115,000, a reminder that the life-changing runs begin before most people are even looking. T The question hanging over this cycle is simple: can a new contender compress that arc, faster, cleaner, earlier, while the window is still open for those willing to move first? Coins still on presales are the ones can repeat this story, and among those coins, an Ethereum based meme coin catches most of the attention, as it’s team look determined to make an impact in today’s market, fusing culture with working tools, with a design built to reward early movers rather than late chasers. If you’re hunting the next asymmetric shot, this is where momentum and mechanics meet, which is why many traders quietly tag this exact meme coin as the best crypto to buy now in a crowded market. Before we dive deeper, take a quick rewind through the case study every crypto desk knows by heart: how Bitcoin went from about $0.0025 to above $100,000, and turned a niche experiment into the story that still sets the bar for everything that follows. Bitcoin 2010-2025 Price History Back to first principles: a strange internet money appears in 2010 and then, step by step, rewires the entire market, Bitcoin’s arc from about $0.0025 to above $100,000 is the case study every desk still cites because it proves one coin can move the entire game. In 2009 almost no one guessed the destination; launched on January 3, 2009, Bitcoin picked up a price signal in 2010 when the pizza trade valued BTC near $0,0025 while early exchange quotes lived at fractions of…
Share
BitcoinEthereumNews2025/09/18 12:41
MOEX to Launch $XRP Indices/Futures: $MAXI Adoption Grows

MOEX to Launch $XRP Indices/Futures: $MAXI Adoption Grows

The post MOEX to Launch $XRP Indices/Futures: $MAXI Adoption Grows appeared on BitcoinEthereumNews.com. MOEX to Launch $XRP Indices/Futures: $MAXI Adoption
Share
BitcoinEthereumNews2026/02/04 06:00