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Euro rises against Pound Sterling as US-Iran diplomacy drives Oil lower

November 10, 2026

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EUR/GBP edges higher as falling Oil prices support the Euro.
Hawkish remarks from ECB and BoE officials keep December rate hike expectations in focus.
Traders await UK and Eurozone GDP data later this week for fresh economic clues.

EUR/GBP trades with a mild bullish bias on Tuesday as falling Oil prices help the Euro (EUR) outperform most of its major peers. At the time of writing, the cross trades around 0.8357, up 0.10% on the day, but remains range-bound near levels last seen in April 2025.

Crude remains under pressure as hopes for a diplomatic breakthrough between the US and Iran ease fears of renewed strikes. West Texas Intermediate (WTI) slips toward $83 a barrel, its lowest level since August 31, and is down about 16% so far this month. Lower Oil offers some relief to the Eurozone, which relies heavily on imported energy.

The brighter market mood also takes some pressure off French bonds. The gap between French and German 10-year yields has narrowed to around 145 basis points (bps) from about 175 bps at its October high, offering the Euro some relief. France’s political uncertainty and budget challenges still pose a risk to the currency.

Traders also assess central bank remarks for clues on December rate decisions. European Central Bank (ECB) Chief Economist Philip Lane told Bloomberg Television it “would be prudent indeed to hike” in December if the data stay broadly unchanged. He expects inflation to end the year “a little bit” above 4%, with core and food inflation likely to pick up.

On the UK side, Bank of England (BoE) Deputy Governor Clare Lombardelli said she wouldn’t rule out a December rate hike, adding that “equally, I don’t have enough information just yet.” The BoE voted 8-1 at its November meeting to raise its benchmark rate by 25 bps to 4.00%. External MPC member Catherine Mann favoured a larger 50 bps increase. The move marked the first hike since 2023, as policymakers seek to contain inflationary pressures stemming from higher energy costs linked to the war in the Middle East.

Analysts at ABN Amro highlight that the BoE’s latest guidance remains firmly hawkish, noting that the MPC “projected inflation to reach around 5% by mid-2027” and explicitly “signalled another increase unless the Middle East conflict is resolved.”

On the data front, the UK releases its first estimate of third-quarter Gross Domestic Product (GDP) on Thursday, followed by updated Eurozone GDP figures on Friday.