EUR/GBP stayed under pressure on Thursday after the ECB’s policy decision failed to support the Euro, while Sterling outperformed major peers. The cross traded around 0.8358, near levels last seen in April 2025, and was down 0.14% on the day. The ECB left its three key rates unchanged, keeping the deposit facility rate at 2.50%, the main refinancing operations rate at 2.65% and the marginal lending facility rate at 2.90%.
ECB Policy and Eurozone Outlook
The ECB flagged higher energy prices as an upside risk to inflation and a downside risk to growth, while saying underlying inflation had been broadly stable and wage dynamics showed little response so far. It restated its aim of steering inflation to 2% over the medium term, and its President said energy prices had moved beyond the baseline as long-term inflation expectations remained near 2%, while adding that fiscal uncertainty could tighten financial conditions.
Sterling Support and Upcoming Data
The Pound drew support as UK budget concerns eased following the Chancellor’s reaffirmation of fiscal rules, alongside market focus on a potential BoE rate move on 5 November. Markets then look to Friday’s Eurozone preliminary Q3 GDP and unemployment data and Germany’s preliminary October CPI.
