The UK has limited macroeconomic updates, weakening the Pound Sterling. Concerns over growth and inflation remain after the S&P Global Services PMI was revised downward. This situation complicates the Bank of England’s decisions and stabilises the euro-pound pair.<\/p>\n
Attention turns to UK employment data, expected to clarify the Bank of England’s policy path. The central bank hints at a gradual approach to easing. EUR\/GBP is likely to remain without a clear short-term direction amid mixed macroeconomic indicators.<\/p>\n
The Euro rose against the Japanese Yen by 0.28%, while USD increased by 0.03%. GBP stayed unchanged, and USD fell by 0.01% against the Euro. The table shows percentage changes against major currencies, with the Euro strongest against the Yen by 0.28%.<\/p>\n
We saw the EUR\/GBP pair trading without a clear trend around 0.8670 back in late 2025, as the market weighed mixed economic signals. However, the UK employment data released in December proved to be a bearish catalyst, revealing persistent wage pressures that have shifted the outlook. This has established a clearer downward trajectory for the pair as we begin 2026.<\/p>\n
The Bank of England’s path became more defined after we saw UK wage growth remain stubbornly high, ending 2025 at an annualized rate of 6.5%, well above the Eurozone average. This has forced markets to delay expectations for any BoE rate cuts, providing underlying support for the Pound. Traders should therefore consider that options pricing now reflects a more hawkish BoE than was anticipated just two months ago.<\/p>\n
On the other side of the channel, we have seen Eurozone inflation fall more rapidly, with the latest flash estimates for December 2025 showing a drop to 2.4%. This divergence from the UK’s inflation story increases the probability that the European Central Bank will be the first to cut interest rates in the first half of this year. Consequently, selling EUR\/GBP rallies has become a favored strategy, with many viewing levels above 0.8600 as potential shorting opportunities.<\/p>\n
Given this clearer, bearish trajectory for the pair, implied volatility for EUR\/GBP options has been declining from the highs we witnessed last year. We believe traders can take advantage of this by selling out-of-the-money call options or establishing bear call spreads to collect premium. Look for key support levels near the 2025 low of 0.8500 as potential targets for put options in the coming weeks.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/GBP remains flat near 0.8670 amid mixed data; markets await UK employment to guide policy.<\/p>\n","protected":false},"author":62,"featured_media":17036,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-38746","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/38746","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=38746"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/38746\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/17036"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=38746"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=38746"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=38746"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}