- The Euro shoots up more than 100 pips against the British pound.
- Lagarde, president of the ECB, opened the door to further rate hikes of 50 basis points in the upcoming meetings.
- The Bank of England’s decision put an end to rate hikes of 75 basis points, although it expressed its commitment to control inflation.
The EUR/GBP cross rebounds as the American session progresses after the decisions of the Bank of England (BoE) and the European Central Bank (ECB) to raise rates 50 basis points each in their last monetary policy meetings of 2022. At the time of writing, The Euro (EUR) has gained ground against the British Pound (GBP) and is trading at 0.8705above its opening price by 1.30%.
The ECB and the BOE raised rates 50 basis points
Risk Aversion keeps EUR/GBP higher. The ECB decision to raise rates 50 basis points It was widely expected, but Quantitative tightening (QT) announcement surprised markets. The ECB’s QT will start in March 2023 at a rate of €15bn, and will last until the second quarter and will be fixed on a rolling basis. The ECB updated its inflation forecasts for 2024 and 2025, expecting them to be at 3.4% and 2.3%, respectively. Due to upward revisions to inflation, the ECB stated that rates would still have to rise “significantly more”.
For her part, ECB President Christine Lagarde stated that it was “obvious” to expect rate hikes of 50 basis points for some time, and added that in February, March and April there could also be a 0.50% rise in the deposit facility. Following Lagarde’s statements, market prices place the ECB terminal rate at around 3%.
On the other hand, the Bank of England raised rates by 50 basis pointssituating the Bank Rate at 3.50%, as expected by analysts. The decision was not unanimously approved., split 7-2, as BoE members Tenreyro and Dhingra opted to abstain, while Catherine Mann voted for a 75 basis point rate hike. The Bank of England has signaled that further rate hikes may be needed to reach its 2% target. They added that “should the outlook suggest more persistent inflationary pressures, I would respond forcefully, as necessary.”
EUR/GBP reaction
After the decisions, the EUR/GBP Extended Gains on Perceived ECB “Aggressiveness”, while the BoE reiterated in its previous meeting that the terminal rate was substantially lower than what the markets were pricing. Since the decision, EUR/GBP rose from 0.8610 to 0.8723.
EUR/GBP technical levels
EUR/GBP
Overview | |
---|---|
Last price today | 0.8713 |
Today I change daily | 0.0117 |
today’s daily variation | 1.36 |
today’s daily opening | 0.8596 |
Trends | |
---|---|
daily SMA20 | 0.8626 |
daily SMA50 | 0.8677 |
daily SMA100 | 0.8636 |
daily SMA200 | 0.8551 |
levels | |
---|---|
previous daily high | 0.8617 |
previous daily low | 0.8576 |
Previous Weekly High | 0.8646 |
previous weekly low | 0.856 |
Previous Monthly High | 0.8828 |
Previous monthly minimum | 0.8572 |
Fibonacci daily 38.2 | 0.8592 |
Fibonacci 61.8% daily | 0.8602 |
Daily Pivot Point S1 | 0.8576 |
Daily Pivot Point S2 | 0.8555 |
Daily Pivot Point S3 | 0.8534 |
Daily Pivot Point R1 | 0.8617 |
Daily Pivot Point R2 | 0.8638 |
Daily Pivot Point R3 | 0.8658 |
Source: Fx Street

I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.