Listen to the latest market mood for the EURGBP pair.

Strong EUR, Weak GBP

The latest move by PM Johnson in bringing a new internal market bill to the UK Parliament has increased the tensions between the EU and the UK. The new bill threatens to undermine the already agreed Withdrawal Agreement from January 2020 and has the EU mulling over a legal response to the UK’s plan. This resulted in significant pressure for the GBP.

The ECB revised their growth projections higher for 2020 to -8.0% and inflation expectations for 2021 were revised up to 1.0%. President Lagarde also seems relatively unfazed by the recent euro strength. This more optimistic response supported the EURUSD this week.

Therefore expect buyers on pullbacks on the EURGBP pair.

Trade Risks: A final deal struck between the EU and the UK will invalidate this outlook.