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2025-10-31 19:20:16
[Euro Approaches 29-Month High Against Pound as ECB Policy Divergence Intensifies] ⑴ The euro has surged against the pound, approaching the key resistance level of 0.8816, its highest level since May 2023, reached on Wednesday. ⑵ Eurozone core inflation remained unchanged at 2.4% in October, higher than the market expectation of 2.3%, providing solid support for the euro. ⑶ Solid inflation data reinforces expectations that the ECB will remain on hold in December, maintaining stable monetary policy. ⑷ The Bank of England's meeting next week (November 6th) carries the risk of an interest rate cut, a prospect that continues to weigh on the pound. ⑸ The divergence in monetary policy is becoming increasingly apparent, with Eurozone inflation stickiness countering a potential easing tendency in the UK. ⑹ Bank of England economists will hold a briefing at 22:30 Beijing time to discuss Bernanke's proposals for 2024. ⑺ A break above the 0.8816 resistance level would push the euro against the pound to a 29-month high, opening up further upside potential. (8) The exchange rate trend fully reflects the difference in policy expectations between the two central banks, and market pricing has begun to reflect this divergence.
