EUR/GBP: Euro / British pound

EUR/GBP is the price of one euro in British pounds. If the pair is quoted at 0.8600, one euro costs 86 pence. It is the main cross between the two largest currencies in Europe, and because the UK and the euro area are each other's close neighbours and big trading partners, the pair often moves more calmly than the dollar majors, with bursts of activity when one side produces a surprise.

This profile covers who trades it, the two central banks behind it, what tends to move it, how it behaves through the day, what it costs to trade, a worked pip value example and the episodes that shaped its history.

What EUR/GBP is and who trades it

EUR/GBP is a cross: a pair without the US dollar. Our guide to currency pairs explains the base/quote convention in detail. Here the euro is the base currency and the pound is the quote currency. When the pair rises, the euro is strengthening against sterling; when it falls, sterling is strengthening.

The pair has real commercial weight behind it. Businesses on both sides of the Channel invoice and pay each other in euros and pounds, tourists and property buyers convert between them, and asset managers hedge holdings of UK and euro area bonds and shares. Banks, corporates, pension funds and hedge funds all trade it, and London, the largest foreign exchange centre in the world, sits right in the middle of it.

For the regulatory definition used by ESMA, EUR/GBP counts as a major because it combines two of USD, EUR, JPY, GBP, CAD and CHF. That means retail clients in the EU can use up to 30:1 leverage on it, even though traders and brokers normally call it a cross. Our guide to ESMA leverage limits explains how those caps work.

The two economies and central banks behind it

The euro area and the ECB

The euro is shared by the members of the euro area, and its monetary policy is set by the European Central Bank's Governing Council in Frankfurt. The Council holds monetary policy meetings roughly every six weeks, eight times a year. Decisions are published at 14:15 Central European Time (13:15 UK time) and followed by a press conference half an hour later. The ECB targets inflation of 2% over the medium term.

The UK and the Bank of England

Sterling is managed by the Bank of England, whose Monetary Policy Committee also makes eight scheduled decisions a year, announced at 12:00 UK time. Its remit is likewise a 2% inflation target, measured by the consumer prices index.

Because the two economies have similar inflation targets, similar structures and heavy trade links, EUR/GBP is often a contest of nuance: which central bank is expected to cut or raise faster, whose inflation is stickier, whose growth is holding up. Our guide to central banks and interest rates explains why expectations matter more than the decisions themselves.

What typically moves EUR/GBP

Rate expectations

The most persistent driver is the expected path of the two policy rates. If markets come to believe the Bank of England will keep rates higher for longer than the ECB, that tends to support sterling (a lower EUR/GBP); the reverse tends to support the euro. The interest rate differential also sets the overnight swap you pay or receive.

Data surprises

UK data from the Office for National Statistics is usually released at 07:00 UK time, before the London open, so CPI and labour market numbers can move the pair as liquidity is still building. Eurostat's flash estimate of euro area inflation usually comes out at 11:00 CET (10:00 UK time), with national figures from Germany, France, Italy and Spain often released earlier. It is the surprise against consensus that matters, not the number itself; see how economic data moves forex.

UK politics and fiscal news

Historically, sterling has been the more politically sensitive half of this pair. The Brexit referendum, general elections and fiscal events have all produced sharp moves in EUR/GBP, and in each case the driver was the pound rather than the euro. Euro area politics (sovereign debt worries, elections in large member states) can move the euro too, but those effects usually show up across all euro pairs.

The dollar, indirectly

Even without the dollar in the name, a big dollar move matters. EUR/GBP is effectively EUR/USD divided by GBP/USD. If a US data surprise sends both lower but GBP/USD falls further, EUR/GBP rises. On days when the dollar dominates, this cross often looks quiet because both legs move together, and that is part of why some traders like it.

Its character: liquidity, sessions and volatility

EUR/GBP is very liquid, but less so than EUR/USD or GBP/USD. Its rhythm follows European business hours.

• Asian session (roughly 23:00 to 07:00 UK time): usually quiet. Spreads are often wider and moves smaller, because neither currency has much local news or participation.
• London open and morning (07:00 to 12:00 UK time): the busiest stretch. UK data at 07:00, European data through the morning, and the full weight of London and Frankfurt desks.
• London and New York overlap (about 13:00 to 17:00 UK time): still active, especially when US news shifts the dollar unevenly against the two currencies.
• Late New York (after about 17:00 UK time): activity drops away.

These UK times hold for most of the year, but clocks change on different dates in the UK, the euro area and the US, so for a few weeks in March and in October/November the New York overlap shifts by an hour. Our market hours tool shows sessions in your own time zone, and the guide to forex market hours and sessions explains the overlaps.

In terms of volatility, EUR/GBP has generally moved less day to day than GBP/USD or EUR/USD, because the two economies tend to move in the same direction and much of any shock is shared. That is a long-run tendency, not a rule. When news is specific to one side, especially the UK, the pair can move abruptly. Treat "quiet pair" as a description of normal days, not a promise about bad ones.

Costs of trading EUR/GBP

Spreads on EUR/GBP are usually a little wider than on EUR/USD, and they tend to widen in the Asian session, around rollover and around big releases. Compare quoted spreads at the time of day you would actually trade; our guides to spreads and commissions and why spreads widen cover what to look for.

Because a pip on EUR/GBP is worth slightly more in euro or dollar terms than a pip on EUR/USD (it is 10 pounds per standard lot rather than 10 dollars), a spread of the same size in pips costs a bit more in money.

If you hold positions overnight, the swap depends on the difference between euro and sterling short-term rates plus the broker's markup. When UK rates are above euro area rates, being long EUR/GBP has typically meant paying swap and being short has meant paying less or receiving a little, but the sign and size change with policy and between brokers. Check the swap table on your platform; see swap and overnight financing.

Pip value: a worked example

A pip on EUR/GBP is 0.0001 and gains and losses are earned in pounds, the quote currency. These numbers are illustrative.

• One standard lot is 100,000 euros. A pip is 100,000 times 0.0001 = 10 GBP.
• One mini lot (10,000 euros) is 1 GBP per pip; one micro lot (1,000 euros) is 0.10 GBP per pip.

Suppose your account is in euros and EUR/GBP is at 0.8600. Ten pounds converted to euros is 10 divided by 0.8600, about 11.63 EUR per pip on a standard lot. If your account is in dollars and GBP/USD is 1.2700, ten pounds is about 12.70 USD.

Now a trade. You sell 0.5 lots (50,000 euros) at 0.8600 with a stop at 0.8640, 40 pips away. Each pip is worth 5 GBP, so the stop would cost about 200 GBP, roughly 233 EUR on a euro account, before spread and swap. If that is more than your risk limit, reduce the size, not the stop. The pip value calculator and position size calculator do this for any account currency.

Margin at 30:1 on that half lot would be about 50,000 divided by 30, roughly 1,667 EUR. That is the collateral the broker holds, not the amount you can lose. See leverage and margin.

Correlations with other pairs

EUR/GBP's relationships are worth knowing because they can double your exposure without you noticing.

• EUR/USD and GBP/USD usually move in the same direction as each other. EUR/GBP captures the difference between them, so its correlation with either is typically weaker and less stable.
• EUR/GBP and GBP/USD often move in opposite directions when sterling is the driver: a sterling sell-off lifts EUR/GBP and pushes GBP/USD down.
• EUR/GBP and EUR/USD often move together when the euro is the driver.

So being long EUR/GBP and short GBP/USD at the same time is largely one bet against sterling. Correlations change, sometimes quickly, so measure them over a recent window rather than relying on rules of thumb. Our guide to currency correlation shows how.

Notable history

The birth of the euro (1999)

The euro was introduced as an accounting currency on 1 January 1999, with notes and coins following in 2002. The UK chose not to adopt it, which is why EUR/GBP exists as a traded pair at all.

The Brexit referendum (23 June 2016)

The UK voted to leave the EU in the referendum held on 23 June 2016. As results came in overnight and into 24 June, sterling fell steeply across the board, reaching its lowest level against the dollar since 1985, and EUR/GBP jumped as the pound weakened against the euro too. Spreads widened sharply during the night. It is a textbook example of gap risk around a scheduled event with a binary outcome: stops placed before the result could be filled far from their level.

The sterling flash crash (7 October 2016)

Early on 7 October 2016, during thin Asian trading, sterling dropped sharply within minutes before recovering much of the fall. EUR/GBP spiked higher at the same time. It is a reminder that the quiet hours for a pair are also the hours when liquidity is thinnest.

The UK mini-budget (September 2022)

The government's fiscal statement on 23 September 2022 triggered a sell-off in gilts and sterling, and the pound hit a record low against the dollar on 26 September. The Bank of England stepped into the gilt market on 28 September. EUR/GBP rose sharply as the pound weakened, then retraced as policy changed course. The episode showed that fiscal credibility, not just central bank policy, can drive the pair.

Trading EUR/GBP as a beginner

EUR/GBP has a reputation as a calmer pair, which can attract beginners for the wrong reason: a small typical range tempts people to use larger position sizes. That is exactly how a quiet pair becomes dangerous on the day it stops being quiet.

• Size from the stop, not from the leverage available. Decide the most you are willing to lose, set the stop where the idea is wrong, then work out the lot size. Our guide to position sizing shows the method.
• Know the calendar. UK CPI, UK labour data, euro area flash HICP and both central bank decisions are the key dates. Use an economic calendar and decide in advance whether you want a position open through them.
• Trade the London hours if you trade it at all. Spreads are usually best and moves most orderly then.
• Watch for doubled exposure. If you also trade GBP/USD or EUR/USD, check what you are really long and short.
• Be realistic. Most retail CFD accounts lose money, and leverage magnifies losses as much as gains. A demo account is a sensible place to learn the pair's rhythm first; see demo account to live trading.

Frequently asked questions

Is EUR/GBP a major or a minor pair?

In everyday trading language it is a cross or minor, because it does not include the US dollar. Under ESMA's leverage rules, though, it counts as a major, because both currencies are on the list of USD, EUR, JPY, GBP, CAD and CHF, so EU retail clients can use up to 30:1.

When is EUR/GBP most active?

Usually during the London session, roughly 07:00 to 17:00 UK time, with the morning the busiest part. The Asian session is normally the quietest, with wider spreads.

How much is a pip worth on EUR/GBP?

On a standard lot of 100,000 euros a pip is worth 10 pounds. Your platform converts that into your account currency, so on a euro or dollar account it is usually worth a little more than 10 units.

Why does EUR/GBP sometimes barely move on big US news?

Because the US news often moves EUR/USD and GBP/USD by similar amounts, and EUR/GBP only reflects the difference between them. If the dollar affects one of the two currencies more than the other, the cross does move.

Is EUR/GBP a low-risk pair?

No pair is low risk. EUR/GBP has often had smaller daily ranges than the dollar majors, but it has also produced sharp moves around the Brexit vote, the 2016 flash crash and the 2022 mini-budget. The risk depends on your position size and leverage much more than on the pair.