EURGBP Short Idea

With the Eurozone's GDP growth lagging at 1.0% and inflation staying below the ECB's target, the EUR faces headwinds in Q1 2025. In contrast, the UK's GDP is projected to grow by 1.5%, supported by easing inflation and higher BoE rates of 4.5% compared to the ECB's 3.25%. This monetary policy divergence and stronger UK economic fundamentals favor GBP over EUR. However, watch for dovish shifts from the BoE or global shocks that may lend safe-haven appeal to the EUR.