EURGBP could see volatility on Tuesday with UK jobs data and Zew surveys.
EURGBP – Daily Chart
EURGBP has recovered from the late-2024 lows as European political issues cooled and sentiment turned against the British pound. There is some resistance at the current levels with a larger target.
The morning session appears quiet but 3pm HKT brings the UK employment numbers. The next data is at 6pm with the German and European Zew surveys. After a tough start to 2025, Britain is said to become the fastest-growing major European economy over the next two years, according to the International Monetary Fund’s latest World Economic Outlook report.
Growth returned to the UK economy for the first time in three months in November, while inflation has also slowed down with gilt yields falling again. The IMF expects British gross domestic product to be up 1.6% in 2025, up on the 1.5% it predicted last October, beating fellow European economies Germany, France and Italy.
The news is a boost for chancellor Rachel Reeves who noted that the UK is the only country to have its growth forecast upgraded for this year, outside the US.
She said: “I will go further and faster in my mission for growth through intelligent investment and relentless reform, and deliver on our promise to improve living standards in every part of the UK through the plan for change,” Reeves said.
The Chancellor had lately faced pressure to step down with borrowing costs at a two decade high. But there was some negative news as it was shown that 88 companies moved out of the British stock market last year, compared to just 18 new listings.
The European Central Bank is on track to lower inflation and cut interest rates again but needs to think about how much further and how quickly policy should be eased, ECB board member Isabel Schnabel said at the weekend.
“However, after the sharp interest rate cuts in recent months, we are getting closer and closer to the point where we need to take a closer look at whether and how much further we can cut interest rates,” said Schnabel.
