The Euro to Pound exchange rate could potentially rise to 0.87, depending on the easing cycle. The market is anticipating cuts from both the European Central Bank (ECB) and the Bank of England (BoE). Currently, there is a lack of significant data causing slow movement in the market.
On Tuesday, employment data will be released in the UK, with the average earnings index expected to moderate. The BoE Chief Economist is also scheduled to speak, potentially impacting the Pound. The likelihood of a rate cut from the BoE in June has increased to 60%, with the possibility of the exchange rate reaching 0.85 or 0.87 against the Euro.
The amount of easing by central banks may have a greater impact on currency movements than the timing of the cuts. The path of cuts will be influenced by economic data and how the economy responds to the initial cuts. Central banks may choose to cut rates moderately and then assess the situation before making further decisions.
Currently, the Euro to Pound exchange rate is expected to remain within a range of 0.85-0.87, with a possibility of testing 0.87 in the future if certain conditions are met.