EUR/GBP strengthens as populism falls apart in Dutch Elections

EUR/GBP advanced to 0.8747, extending the Wednesday’s sharp recovery from the low of 0.8663 after Wilder’s far right party was defeated in Dutch elections.

The defeat of the far right Populist Party in Dutch elections also means decreased probability of Le Pen victory in French elections later this year. As per Bloomberg data, LE Pen’s odds of winning the French elections slipped below 30% after the Dutch election results.

Focus on BOE decision

BOE is widely seen keeping interest rates unchanged. However, the markets would scan the policy statement and minutes for commentary on rising inflation and interest rates.

The Eurozone final CPI reading for February is unlikely to move the FX markets, unless there is significant upward or downward revision to the preliminary estimate.

EUR/GBP Technical Levels

The cross was last seen trading around 0.8740. A break above 0.8763 (Jan 10 high) would open doors for 0.8786 (Mar 14 high) and 0.88 (zero figure). On the other hand, a breakdown of support at 0.8721 (session low) could yield a sell-off to 0.8698 (10-DM) and 0.8663 (previous day’s low).