How do you read the euro-sterling balance of risks?

FTC Community TeamStaff95 views

The euro and sterling sit on different sides of the growth-inflation trade-off: the ECB has been hiking into recovering growth, the Bank of England into rising inflation (UK CPI).

How do you read the euro-sterling balance of risks? — central bank rate path diagram
A central bank's policy rate path across recent meetings

What's your balance?

How do you read the euro-sterling balance of risks? — risk-reward diagram
A risk-reward ratio of 1 to 2
  • which side of EUR/GBP carries the better story for you
  • the data that would tip the balance
  • how you express the view without the dollar

Background: cross rates explained.

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