EUR/GBP recovery to near 0.8450 appears stalling as France encounters hung Parliament

EUR/GBP lacks the strength to extend its recovery above 0.8450 as France faces political uncertainty.
ECB Knot supports for keeping interest rates steady in July but is open for the September meeting.
The Pound Sterling remains firm as UK Keir Starmer’s victory brings political stability.

Sagar Dua FXStreet

The EUR/GBP pair struggles to extend recovery above the immediate resistance of 0.8450 in Tuesday’s early European session. The upside in the cross appears to have been limited by French’s political uncertainty as the Left Wing, also known as New Popular Front, led by Jean-Luc Melenchon unexpectedly gained an upper hand with President Emmanuel Macron's centrist alliance and Marine Le Pen-led-Far Right National Rally as runner ups.

Market participants expect that the Central Alliance will join hands with the Left Wing to form a coalition government, which will pass through significant negotiations for distribution of new ministers. While fears of widening French debt crisis have eased as Far Right fails to make an absolute majority, which was expected to have favored expansionary fiscal measures.

On the monetary policy front, the debate about whether the European Central Bank (ECB) will deliver subsequent rate cuts is gaining traction. ECB officials are scheduled to meet on July 18. On Monday, ECB policymaker and Dutch central bank chief Klaas Knot said in an interview with Handelsblatt, I don't see a case for another rate cut in July." However, he said that he is comfortable with market expectations of more rate cuts this year and he is open for the September meeting.

In the United Kingdom region, uncertainty over the Bank of England (BoE) 's decision to begin reducing interest rates from the August meeting has deepened. On Monday, BoE policymaker Jonathan Haskel supported leaving interest rates unchanged for as long as price pressures remain firm in the labor market. The UK’s wage growth is significantly higher than what is required to bring service inflation down.

Meanwhile, the broader appeal of the Pound Sterling remains firm against the Euro. The absolute victory of Keir Starmer's Labour Party against Rishi Sunak's Conservative Party in UK parliamentary elections has brought political stability to the economy, which is favorable for the economy’s financial markets.

Economic Indicator

BoE's Haskel speech

Jonathan Haskel will serve a 3-year term as a Bank of England Monetary Policy Committee member from September 2018, replacing Ian McCafferty. Professor Haskel is currently a Professor of Economics at Imperial College Business School, where he will continue to teach part-time, and prior to that was Head of the Economics Department at Queen Mary, University of London. He is a Non-Executive Director of the UK Statistics Authority and has expertise in productivity growth, and particularly intangible assets.

EUR/USD rises to near 1.1650 amid dovish Fed expectations

EUR/USD edges higher after registering gains in the previous six successive sessions, trading around 1.1650 during the Asian hours on Monday. The pair appreciates as the US Dollar struggles amid dovish Federal Reserve expectations. Friday’s slower-than-expected US jobs growth suggests the US central bank could hold interest rates steady later this month.

GBP/USD rebounds from three-week low, eyes mid-1.3400s as Fed concerns weigh on USD

The GBP/USD pair attracts some buyers near a technically significant 200-day Simple Moving Average (SMA) and recovers slightly from a nearly three-week low, touched during the Asian session on Monday. Spot prices, for now, seem to have snapped a four-day losing streak and currently trade around the 1.3435 region, up 0.20% for the day.

Gold tests $4,600, then retreats despite geopolitical, Fed woes

Gold retreats from fresh record highs of $4,601 in the Asian session on Monday. Reports that US President Donald Trump is weighing a series of potential military options in Iran fuel the risk of a further escalation of geopolitical tensions will likely keep Gold underpinned despite the latest profit-taking pullback.

Week ahead: US CPI might challenge the geopolitics-boosted Dollar

Geopolitics may try to steal the limelight from US data. A possible US Supreme Court ruling on tariffs could dictate market movements. Dollar strength might be tested if investors refocus on Fed expectations. A crammed data calendar next week, US CPI comes on Tuesday; Fedspeak to intensify. Euro weakness persists, lingering risk of deterioration in US-EU relations.

2026 economic and market outlook

As an aggregate, key economic indicators point towards the global economy growing further in out 2026 Economic and Market outlook. In particular, the G20 countries, which account for roughly 80% of the total global GDP are projected to grow by 2.9% next year.

XRP trades under pressure amid weak retail demand

XRP presses down on the 50-day EMA support as risk-averse sentiment spreads despite a positive start to 2026. XRP faces declining retail demand, as reflected in futures Open Interest, which has fallen to $4.15 billion.