EUR/GBP hits session lows as GBP/USD rebound leaves EUR/USD behind

Since the European close this evening the EUR/GBP has been tracking lower. It has now fallen back very close to the 0.8700 handle. The prospect of it falling back was alluded to earlier today, but in truth it has taken several hours to work its way lower. The push lower comes following a clearer realisation around the markets; that the Bank of England is going keep rates on hold for as long as it takes and until what looks like embedded inflation is removed. That was very much the message from the BOE governor and his colleagues earlier today, when testifying in front of the House Select Committee. So, eventually that has found its way into a higher pound this evening and those gains are not just limited to the Euro, because it is closer to session highs versus the dollar and the GBP/JPY is in a similar position too. The EUR/GBP has so far held the 0.8700 handle, with 0.8702 the low as I type. The shift in outlook for UK monetary policy looking forward comes ahead of the UK Budget tomorrow and the pound looks like it expects something good there. We shall see on that and there will oil course be much more on the Pound tomorrow