EUR/GBP Rises Above 0.8500 as ECB Signals Pause in Rate Cuts Ahead of ZEW Surveys

EUR/GBP Rallies Above 0.8500 as ECB Signals End of Easing Cycle

The EUR/GBP pair continued its upward momentum on Tuesday, reaching around 0.8520 in early European trading. The Euro (EUR) remains firm against the Pound Sterling (GBP) as the European Central Bank (ECB) hints at ending its cycle of monetary easing, while expectations for a Bank of England (BoE) rate cut continue to drag on the British currency.

ECB Rhetoric Supports the Euro

Market sentiment favors the Euro as top ECB policymakers adopt a more hawkish stance. ECB President Christine Lagarde said that the ECB is now “in a good position” to pause rate cuts amid resilient inflation and economic stability.

Additionally, ECB Executive Board member Isabel Schnabel recently suggested that the central bank is close to ending its rate-cutting cycle. ECB Governing Council member Gediminas Simkus echoed these views, emphasizing the need for caution due to heightened uncertainty over US trade policy and the recent introduction of new US tariffs.

BoE Outlook Pressures GBP

In contrast, the British Pound remains under pressure due to mounting expectations that the Bank of England will implement a rate cut soon. Weaker UK economic indicators and the dovish outlook from BoE officials continue to weigh on Sterling performance.

ZEW Economic Sentiment Surveys Awaited

Investors now turn their attention to the upcoming ZEW Economic Sentiment Surveys for Germany and the Eurozone, which are scheduled for release later today. The results may influence short-term EUR moves, especially if sentiment improves in the face of slowing global trade dynamics.

Conclusion

As markets digest the ECB's shift away from easing and brace for BoE dovishness, the EUR/GBP pair appears poised to remain supported. Upcoming ZEW data could either reinforce or soften the bullish bias in the Euro.