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EUR/GBP Forecast: Euro Takes Centre Stage Via ECB Speakers

January 11, 2023

Via: DailyFX

The euro extended yesterday’s gains against the British pound through ECB officials beginning yesterday. The hawkish narrative was reinforced by one of the more aggressive officials in Isabel Schnabel while today’s addresses included the ECB’s Villeroy who stated the need for additional interest rate hikes in the coming months. Currently, money markets are pricing in roughly two back to back 50bps hikes in February and March. The Bank of England (BoE) on the other hand, is being forecasted to move slightly slower considering they commenced their hiking cycle far earlier than the ECB. That being said, higher relative rate hikes could support euro strength over the next few months.

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