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EUR/GBP remains depressed below 0.8700 after hot UK CPI figures

  • EUR/GBP extends losses for the second consecutive day and trades below 0.8700.
  • UK consumer price figures confirm the inflationary impact of the US-Iran war.
  • In the Eurozone, ECB speakers, including President Lagarde, will grab some attention later in the day.

The Euro (EUR) is heading south for the second consecutive day against the British Pound (GBP) on Wednesday, trading near session lows below 0.8700, as UK inflation figures put pressure on the Bank of England to bring the possibility of an interest rate hike back to the table.

Data released by the Office for National Statistics earlier on Wednesday showed that the UK Consumer Prices Index (CPI) accelerated to a 3.3% year-on-year (YoY) rate in March. These figures follow two consecutive months of prices growing steadily by 3% YoY, and highlight the inflationary impact of the Middle East war.

The monthly CPI accelerated by 0.7%, its highest level in almost one year, beating expectations of a 0.6% increase, and following a 0.4% gain in February.

Likewise, producer and retail prices have increased beyond forecasts. The Input Producer Prices Index (PPI) surged 4.4% in March and 5.4% year on year. Retail prices rose 0.8% from February and 4.1% over the last 12 months, both above market expectations of 0.7% and 3.9%, respectively.

The Bank of England (BoE) meets on April 30 and is widely expected to keep interest rates unchanged. The upside risks to inflation, however, are likely to give hawkish committee members grounds to call for some monetary tightening down the road.

In the Eurozone, the focus on Wednesday will be on a slew of European Central Bank (ECB) speakers, including President Christine Lagarde, later in the day. The ECB is also expected to keep its monetary policy on hold at its April meeting, and therefore, they are likely to stick to the mantra of waiting for further economic data.

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EUR/GBP under pressure as Eurozone sentiment deteriorates sharply in April

  • EUR/GBP edges lower as the Pound outperforms on resilient UK labor data.
  • Weak Eurozone ZEW sentiment weighs on the Euro amid growth concerns.
  • Focus shifts to UK inflation data on Wednesday for monetary policy cues.

EUR/GBP trades on the back foot on Tuesday, with the British Pound (GBP) outperforming the Euro (EUR) following broadly resilient UK labor market data, while softer economic sentiment from the Eurozone adds further pressure on the Euro.

At the time of writing, the cross is trading around 0.8700. However, it lacks strong directional momentum and remains range-bound as traders stay cautious amid ongoing US-Iran tensions and uncertainty over potential peace talks.

European sentiment weakened notably in April, with the Eurozone’s ZEW Economic Sentiment Index falling to -20.4 from -8.5 and Germany’s ZEW Economic Sentiment Index dropping to -17.2 from -0.5, both missing expectations.

The sharp drop in sentiment shows that ongoing tensions in the Middle East are starting to weigh on the Eurozone’s outlook. “Businesses are concerned about long-term shortages of energy supply, and this discourages investment and weakens the effect of government stimuli,” said ZEW President Professor Achim Wambach, commenting on the latest survey results.

Meanwhile, markets are also pricing in potential interest rate hikes from the European Central Bank (ECB), as rising Oil prices fuel inflation concerns. However, policymakers remain cautious and are not signaling any immediate policy shift. ECB Vice-President Luis de Guindos said on Tuesday, “I believe we need to be cautious, keep a cool head and analyse the data in a context of tremendous uncertainty.”

ECB President Christine Lagarde said on Monday that policymakers need to gather more information before drawing firm conclusions for monetary policy.

Earlier in the day, data released by the Office for National Statistics showed that the Claimant Count Change rose by 26.8K in March, above expectations. However, other labor market indicators pointed to underlying resilience. Employment Change came in at 25K in the three months to February, while the ILO Unemployment Rate eased to 4.9% from 5.2%.

The mixed but resilient labor market data suggest that the Bank of England (BoE) can afford to remain patient on policy easing, even as markets price in the risk of rate hikes driven by higher Oil prices. UK inflation data for March, due on Wednesday, could further influence interest rate expectations.

A Reuters poll on Tuesday showed that all 62 economists expect the BoE to keep the Bank Rate at 3.75% at its April meeting. Around 53% also expect rates to remain unchanged for the rest of the year.

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD0.22%0.12%0.18%-0.00%0.20%-0.25%0.19%
EUR-0.22%-0.10%-0.04%-0.23%-0.02%-0.48%-0.03%
GBP-0.12%0.10%0.06%-0.11%0.06%-0.38%0.07%
JPY-0.18%0.04%-0.06%-0.17%0.00%-0.48%-0.00%
CAD0.00%0.23%0.11%0.17%0.18%-0.30%0.18%
AUD-0.20%0.02%-0.06%-0.01%-0.18%-0.48%-0.01%
NZD0.25%0.48%0.38%0.48%0.30%0.48%0.47%
CHF-0.19%0.03%-0.07%0.00%-0.18%0.00%-0.47%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

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GBP/USD – Falls toward 1.3500 near nine-day EMA support

  • GBP/USD may find the primary barrier at the two-month high of 1.3599.
  • The 14-day Relative Strength Index near 59 remains positive, without indicating overbought conditions.
  • The immediate support lies at the lower boundary of the ascending channel around 1.3500.

GBP/USD inches lower after registering modest gains in the previous day, trading around 1.3520 during the Asian hours on Tuesday. The technical analysis of the daily chart indicates an ongoing bullish bias, as the pair moves within the ascending channel pattern.

The GBP/USD pair trades with a mildly bullish near-term bias, holding above both the nine-period and 50-period Exponential Moving Averages (EMAs). The short-term EMA trading above the longer one hints at constructive momentum.

The 14-day Relative Strength Index (RSI) around 59 stays in positive territory without yet signaling overbought conditions, suggesting room for further gains as long as the pair remains supported on dips.

The initial barrier lies at the two-month high of 1.3599, recorded on April 17, followed by the upper boundary of the ascending channel around 1.3750. A break above the channel would reinforce the bullish bias and support the GBP/USD pair to approach the 1.3869, the highest level since September 2021, reached on January 27.

On the downside, the GBP/USD pair may find its immediate support at the lower boundary of the ascending channel around 1.3500, followed by the nine-day EMA at 1.3493. Further declines below this confluence support zone would put downward pressure on the pair to test the 50-day EMA at 1.3423. A sustained break below the medium-term average would expose a nearly five-month low of 1.3159, recorded on March 31, followed by the 1.3010, the lowest since April 2025, which was recorded in November 2025.

GBP/USD: Daily Chart

Pound Sterling Price Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the weakest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD0.09%0.10%0.06%0.00%0.10%-0.32%0.08%
EUR-0.09%0.02%-0.02%-0.09%0.04%-0.41%0.00%
GBP-0.10%-0.02%-0.02%-0.10%0.00%-0.43%-0.01%
JPY-0.06%0.02%0.02%-0.05%0.02%-0.43%0.00%
CAD-0.00%0.09%0.10%0.05%0.08%-0.36%0.07%
AUD-0.10%-0.04%-0.01%-0.02%-0.08%-0.44%-0.01%
NZD0.32%0.41%0.43%0.43%0.36%0.44%0.43%
CHF-0.08%-0.00%0.01%-0.01%-0.07%0.00%-0.43%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

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Pound Sterling – GBP trades mixed at the start of UK data-packed week

  • The Pound Sterling trades mixed against its peers while investors await a string of UK data.
  • The UK’s headline CPI is expected to have risen at a faster pace of 3.3% in March.
  • Iran refuses to return to the table for another round of talks with the US.

The Pound Sterling (GBP) exhibits a mixed performance against its major currency peers during the European trading session on Monday. The British currency is expected to remain volatile as a slew of United Kingdom (UK) economic data is scheduled to be published this week.

Pound Sterling Price Today

The table below shows the percentage change of British Pound (GBP) against listed major currencies today. British Pound was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-0.05%-0.00%0.19%-0.01%0.22%0.09%-0.04%
EUR0.05%0.05%0.22%0.01%0.26%0.14%-0.02%
GBP0.00%-0.05%0.17%-0.02%0.20%0.10%-0.07%
JPY-0.19%-0.22%-0.17%-0.18%0.03%-0.13%-0.25%
CAD0.01%-0.01%0.02%0.18%0.22%0.07%-0.06%
AUD-0.22%-0.26%-0.20%-0.03%-0.22%-0.13%-0.28%
NZD-0.09%-0.14%-0.10%0.13%-0.07%0.13%-0.14%
CHF0.04%0.02%0.07%0.25%0.06%0.28%0.14%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).

Investors will pay close attention to the UK employment data for THE three months ending February, and the Consumer Price Index (CPI) and Retail Sales data for March to get fresh cues on the Bank of England’s (BoE) monetary policy outlook.

The UK employment data on Tuesday is expected to show that the Average Earnings Excluding Bonuses, a key measure of wage growth, rose at a moderate pace of 3.5% Year-on-Year (YoY) against the previous reading of 3.8%. The ILO Unemployment Rate is seen as steady at 5.2%.

The inflation report on Wednesday will likely demonstrate a strong growth in the headline CPI by 3% YoY, against 3% in February, in the wake of higher energy prices due to the war in the Middle East. On Friday, the UK Retail Sales, a key measure of consumer spending, is estimated to have risen 0.2% on a monthly basis after declining 0.4% in February.

Meanwhile, the recent commentary from BoE Governor Andrew Bailey, in the International Monetary Fund (IMF) last week, suggests that the central bank will hold interest rates steady in the policy meeting on April 30. Bailey said that there is “no rush” for monetary policy adjustments despite a negative energy shock.

This week, investors will also focus on the preliminary UK S&P Global Purchasing Managers’ Index (PMI) data for April, which will be released on Thursday.

Against the US Dollar (USD), the Pound Sterling recovers a majority of its early losses and rebounds to near 1.3515. However, the outlook of the GBP/USD pair remains uncertain amid uncertainty surrounding the occurrence of another round of talks between the United States (US) and Iran.

Iran’s foreign ministry spokesperson Esmail Baghaei said during the day that there is “no plan for a second round of negotiations with the United States (US) for now.

(This story was corrected at 11:30 GMT to say in the third paragraph that Average Earnings Excluding Bonuses, a key measure of wage growth, rose at a moderate pace of 3.5% Year-on-Year (YoY) against the previous reading of 3.8% and not the previous reading of 3.5%)

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GBP/USD: Political noise and softer BoE pricing – ING

ING’s Chris Turner notes Sterling has held up even as markets scale back Bank of England tightening expectations to just one 25bp hike this year, while ING expects no change in rates. Political scrutiny of Prime Minister Keir Starmer could weigh on sentiment. ING warns GBP/USD may surrender recent gains, eyeing 1.3380/1.3400 as an initial downside target.

Sterling resilience faces policy and politics

“Sterling has been performing reasonably well despite the market removing a lot of the expected Bank of England tightening this year. The market still prices one 25bp hike this year, while our team sees unchanged rates. That hike may not be priced out until oil prices drop, however.”

“There is also the small matter of politics in the UK. Prime Minister Keir Starmer will today make a statement in parliament to potentially correct the record on the approval process for the former UK ambassador to the US, Peter Mandelson.”

“This will be a tough session for PM Starmer and one which will extend into tomorrow, when the top civil servant involved in the approval process also appears at a parliamentary hearing.”

“GBP/USD could well hand back a big chunk of recent gains this week, with a first target being around the 1.3380/3400 area.”

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EUR/GBP edges up above 0.8700 with UK’s PM Starmer in question

  • The Euro appreciates against a weaker Pound as pressure on UK Prime Minister Starmer grows.
  • Markets opened the week in a cautious tone with the US-Iran peace process on tenterhooks.
  • German PPI rose 2.5% in March, its strongest reading since August 2022.

The Euro (EUR) advances on Monday against a somewhat weaker British Pound (GBP), as the UK Prime Minister, Keir Starmer, heads to the House of Commons to answer questions about former US ambassador Peter Mandelson’s vetting process.

Lord Mandelson’s appointment caused a scandal last year, due to his ties with convicted sex offender Jeffrey Epstein. Opposition parties are blaming Starmer for failing the security vetting for the position and calling on him to resign for misleading parliament on previous statements related to the appointment.

Cautious markets with the US-Iran peace process teetering

The market, meanwhile, remains cautious, with most currencies trading within previous ranges as the US and Iran exchange threats, with the second round of peace talks in question. The US has seized an Iranian cargo ship attempting to cross the Strait of Hormuz, and Iranian authorities said that they might not attend the peace talks scheduled for next Tuesday due to US violations of the ceasefire.

In Europe, German Producer Prices Index (PPI) data revealed that inflation at factory gates jumped 2.5% in March, its highest monthly reading in nearly four years, confirming the inflationary impact of the war in the Middle East. Year-on-year, the PPI contracted 0.2% following a 3.3% drop in February.

In the UK, the economic calendar is thin on Monday, with the focus on February’s employment report due on Tuesday. Jobless claimants are expected to have eased to a 21.4K increase, from 24.7K in January, while the Unemployment rate is seen steady at 5.2%, and wage inflation is easing somewhat. This will provide the Bank of England with some margin to keep interest rates on hold for some time.

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Pound Sterling declines as BoE hike bets ease

  • GBP/USD stays pressured as traders trim BoE hike bets amid optimism of easing Middle East tensions.
  • BoE’s Bailey said that the central bank won’t rush rate decisions amid the energy shock from the Iran conflict.
  • Lebanon’s army recorded multiple Israeli ceasefire violations after the truce took effect.

GBP/USD loses ground for the third successive day, trading around 1.3520 during the Asian hours on Friday. The Pound Sterling (GBP) remains under pressure as traders pare back expectations for a Bank of England (BoE) rate hike, amid increasing optimism that tensions in the Middle East may be easing.

BoE Governor Andrew Bailey told BBC News on Thursday that the central bank is “not going to rush to judgments” on interest rate increases as global policymakers navigate an energy price shock driven by the Iran conflict. Bailey noted that while higher oil and gas prices will feed into inflation, other factors make rate decisions “very, very difficult.”

BoE policymaker Megan Greene said in a Bloomberg TV interview on Wednesday that markets were justified in scaling back bets on rate hikes following last month’s surge. Greene indicated that the current market pricing, suggesting two or fewer rate increases this year, is “about right.”

The GBP/USD pair also declines as the US Dollar (USD) edges higher, supported by increased safe-haven demand following a CNN report that the Lebanese army recorded multiple ceasefire violations by Israel after the truce came into effect. US President Donald Trump announced on Thursday that Israel and Lebanon agreed to a 10-day ceasefire that started at 5 PM ET.

Lebanon accused Israel of carrying out “a number of acts of aggression,” noting that intermittent shelling has affected several villages in southern Lebanon. The army also urged residents to delay returning to southern towns and villages amid the reported ceasefire breaches.

However, market sentiment could improve as Washington and Tehran are expected to resume discussions over the weekend, with President Trump maintaining an optimistic tone on the chances that both sides could secure a lasting ceasefire before its expiration next week.

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Trade of the day: GBPCHF (16.04.2026)

Facts

  • GBPCHF pair moved back above the 14-day exponential moving average (EMA14; light purple) yesterday, despite a brief dip below 1.058 during the early session.
  • One week Risk Reversal indicator has reached its highest level since July 2024.
  • RSI is currently oscillating between 50 and 60.

Recommendation

  • Long Position (BUY) at market price in GBPCHF
  • Target Prices (Take Profit): 1.06340 (TP1), 1.06645 (TP2)
  • Stop Loss (SL): 1.05400

Source: xStation5

Opinion

The GBPCHF sell-off triggered by the outbreak of conflict in the Middle East capped months of Sterling weakness, driven by growth concerns and expectations of UK rate cuts. Approximately one week after the US and Israeli strikes on Iran, the pair initiated an upward trajectory. This shift is supported by the UK’s significant exposure to surging natural gas prices, which increases the risk of an inflationary rebound and a return to interest rate hikes.

Following a correction earlier this week, the pair is gradually rebounding, confirming the ongoing trend. While the UK still faces a high risk of stagflation, today’s GDP data (+0.5% m/m; exceeding the Reuters consensus of 0.1%) has somewhat cooled recession fears amid energy price inflation. Growing optimism is also reflected in the options market: the 1-week Risk Reversal is at its highest since July 2024, indicating a decrease in hedging demand against Sterling declines (i.e., fewer PUT options).

Sterling should remain supported against the Franc in the short term, regardless of further developments in the Strait of Hormuz. In an escalation scenario, concerns over energy price pressure would exert symmetrical pressure on the Bank of England to resume rate hikes (the market currently prices one 25 bps hike for September). Conversely, de-escalation would reduce fears of economic stagnation and dampen demand for safe-haven assets, including the Franc. It is worth noting that the Franc also lost ground against the Dollar in March, suggesting it was not the primary choice for investors seeking a “safe harbor” for capital.

Methodology

This recommendation was prepared based on a technical analysis of the GBPCHF chart and a fundamental analysis of the respective economies (focusing on UK monetary policy).

  • Directional Bias: Established using moving averages, price action, and market expectations regarding central bank responses to the Middle East conflict.
  • Exit Strategy: Target and Stop Loss levels were determined using Fibonacci retracements of the latest downward leg, Bollinger Bands, and Price Action. TP1: Set at the 78.6% Fibonacci level, coinciding with the upper Bollinger Band on the 14-day interval. TP2: Set at the resistance level established between February 2nd and 3rd. Stop Loss: Placed at the 50% Fibonacci level, which coincides with the lower Bollinger Band and the 50-day EMA.
  • TP1: Set at the 78.6% Fibonacci level, coinciding with the upper Bollinger Band on the 14-day interval.
  • TP2: Set at the resistance level established between February 2nd and 3rd.
  • Stop Loss: Placed at the 50% Fibonacci level, which coincides with the lower Bollinger Band and the 50-day EMA.