GBP weakens versus EUR on reduced BoE tightening expectations
The British Pound has weakened against the Euro due to reduced Bank of England tightening expectations and political developments.
The pound had staged a rally against the EUR from late June into early July, but this subsequently went into reverse at the start of last month.
The market is currently pricing in a reduced expectation of a rate hike by the end of the year, though this is still considered too aggressive.
A re-pricing in policy expectations towards steady policy from the BoE this year combined with the prospect of nervousness ahead of the October budget suggests scope for downside pressure on the pound.