Eurozone energy dependency and stalled US-Iran talks weigh on the Euro, offsetting hawkish ECB signals.
The EUR/GBP pair retreated to 0.8660 in early European trading on Wednesday, pressured by concerns over the Eurozone’s vulnerability to Middle East energy shocks. Escalating US-Iran tensions and stalled negotiations have heightened fears of supply disruptions, dragging the Euro lower against the British Pound.
Market focus shifts to upcoming Eurozone GDP data, which could further influence the pair. Earlier, ECB policymaker Joachim Nagel suggested rising odds of a rate hike due to geopolitical risks, providing limited support. Meanwhile, UK political instability may cap GBP gains as Prime Minister Keir Starmer faces calls to step down.