Traders increase expectations for ECB tightening after oil prices climb, pushing the euro higher against the pound.
The EUR/GBP cross climbed to 0.8535 in early European trading on Wednesday, driven by rising bets on European Central Bank rate hikes. Surging oil prices have reignited inflation concerns, prompting markets to price in further tightening from the ECB.
Prior to the move, the pair had traded near 0.8500, with consensus expectations leaning toward a more cautious ECB stance. The shift follows a broader repricing of central bank policy amid persistent inflationary pressures.
No immediate market reaction was specified, but the move reflects heightened sensitivity to energy-driven inflation risks.