Why Is EUR/GBP Climbing? BoE Rate Cuts vs. Trump's Trade War Threats

The bitcoin price prediction 2025 in inrEUR/GBP cross continues demonstrating bullish momentum in Friday's Asian trading, marking its fourth consecutive daily advance as the pair approaches the 0.8350 psychological level. This upward movement primarily reflects shifting monetary policy expectations between the Eurozone and United Kingdom.

Sterling weakness emerged following Thursday's Bank of England decision to implement a 25 basis point reduction in interest rates. Governor Andrew Bailey's subsequent comments reinforced market expectations for additional monetary easing throughout 2025, with traders currently pricing in two to three further rate reductions from the British central bank.

Notably, the Monetary Policy Committee demonstrated unanimous support for policy accommodation, though divisions emerged regarding the appropriate degree of easing. Seven members favored the implemented quarter-point cut while two more dovish policymakers advocated for a more aggressive 50 basis point reduction.

While the BoE's accommodative stance continues supporting EUR/GBP upside, potential headwinds may emerge from transatlantic trade developments. Former US President Donald Trump recently characterized the trade imbalance with the European Union in stark terms, suggesting imminent tariff implementation. EU authorities have indicated preparedness to enact countermeasures should such trade restrictions materialize.

Across the Channel, European Central Bank officials maintain their measured approach to policy normalization. Last week's 25 basis point reduction in the Deposit Facility rate to 2.75% was accompanied by signals suggesting additional cuts remain probable in coming months. Bank of Portugal Governor Mario Centeno recently emphasized the importance of maintaining downward momentum in rates while avoiding premature commitment to specific easing timelines.

The evolving monetary policy divergence between the ECB and BoE continues shaping EUR/GBP dynamics, though traders remain attentive to potential trade policy developments that could influence the cross's trajectory. Market participants will monitor upcoming economic data releases and central bank communications for further directional cues.

Technical analysts note the pair's current positioning near multi-week highs, with potential resistance levels emerging around the 0.8370-0.8400 zone. Support appears established near the 0.8300 handle, representing both psychological and technical significance.