The EUR\/GBP rate fell to around 0.8660, marking a 0.15% decrease, due to German inflation data hitting the ECB’s target. German inflation data indicated easing pressures, with the Harmonized Index of Consumer Prices showing a monthly inflation rate of 0.2% for December, down from 2.6% annually. This matches the ECB’s target, suggesting a continued disinflation trend in Germany’s economy. <\/p>\n
Meanwhile, the Pound Sterling remained steady, anticipating next week’s UK employment and inflation data releases. The UK economy expanded with a GDP growth of 0.3%, surpassing forecasts of 0.1%. This positive data eased concerns about potential swift monetary policy changes from the Bank of England. The Bank of England had indicated a gradual easing of monetary policy, which may support the Pound against the Euro ahead of incoming UK economic data. As a result, EUR\/GBP remains affected by these anticipated data releases and policy adjustments. <\/p>\n
For other currencies, the Euro saw mixed performance, strengthening against the US Dollar but weakening against other major currencies such as the GBP and AUD. The table showed percentage changes for EUR against major currencies, with specific strengths and weaknesses on that trading day.<\/p>\n
The current market for EUR\/GBP is following a pattern we saw developing through 2025. Last year, when German inflation briefly met the European Central Bank’s 2% target, it reinforced the view that monetary policy in the Eurozone would remain stable. This continues to put pressure on the Euro, especially against a more resilient Pound Sterling.<\/p>\n
This view is complicated by more recent data, which shows Eurozone-wide core inflation for December 2025 proved stubborn, sitting at 3.4%. This persistence suggests that underlying price pressures are not yet under control, forcing the ECB to maintain a cautious stance. We are seeing traders use options to protect against any unexpected hawkish tones from ECB officials in the coming weeks.<\/p>\n
On the UK side, the economic strength we noted in 2025 seems to be holding steady. Crucially, recent wage growth figures from late 2025 remained high at 7.2%, giving the Bank of England little reason to consider cutting interest rates soon. This ongoing wage pressure is a key factor supporting our belief that long positions in the Pound against the Euro remain favorable.<\/p>\n
For the next few weeks, a bearish outlook on the EUR\/GBP pair is warranted, with a potential move towards lower levels. We should consider buying put options on EUR\/GBP, which would profit from a drop in the pair’s value while clearly defining our maximum risk. Selling EUR\/GBP futures contracts is a more direct strategy to express this view, though it requires more active management.<\/p>\n
The upcoming UK inflation and employment data will be the next major catalyst for the pair. If those figures come in strong, as they did last year when GDP surprised to the upside, it will solidify the Bank of England’s position and could send EUR\/GBP below the 0.8600 mark. Any unexpected weakness in that UK data, however, would challenge this outlook and provide a moment to reassess our positions.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" EUR\/GBP dips as German inflation eases; Pound steady on UK growth, ahead of key data releases.<\/p>\n","protected":false},"author":62,"featured_media":17033,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-39384","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\/39384","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=39384"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/39384\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/17033"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=39384"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=39384"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=39384"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}