- EUR/GBP gains ground as the BoE dovish pause increased expectations for a rate cut in August.
- The Euro could struggle due to uncertainties surrounding the outcome of a snap election in France.
- The headline German IFO Business Climate Index fell to 88.6 in June from 89.3 in May.
EUR/GBP extends its gains for the third successive session, trading around 0.8460 during the European session on Monday. The British Pound (GBP) remains under pressure following the Bank of England's (BoE) dovish pause last week, which increased expectations for an interest rate cut at the August monetary policy meeting.
Thursday’s BoE statement and minutes indicated that officials are nearing a decision to cut interest rates, as noted by ING’s FX Strategist Francesco Pesole. Pesole mentioned that "three rate cuts in 2024 starting from August remain ING’s base case," which is more dovish compared to the two cuts currently priced in by the market.
Additionally, the flash UK PMIs released on Friday showed that private sector business activity in June expanded at its slowest rate since last November. This has exerted further pressure on the Pound Sterling, bolstering the EUR/GBP cross.
The EUR/GBP cross may limit its upside as the Euro could struggle due to uncertainties surrounding the outcome of a snap election in France, fueling concerns that a new government might worsen the fiscal situation in the Eurozone's second-largest economy.
On Monday, the headline German IFO Business Climate Index fell to 88.6 in June from 89.3 in May, coming in below the market expectation of 89.7. The Current Assessment Index remained unchanged at 88.3, while the Expectations Index dropped to 89.0 from 90.4. This weaker German data could put pressure on the Euro, further limiting the upside of the EUR/GBP cross.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD plummets toward 0.6200 ahead of US NFP data
AUD/USD has come under intense selling pressure, falling hard toward 0.6200 early Friday. US-China trade tensions, increased odds of Trump's tariffs-led global recession and dovish RBA expectations undermine the risk-sensitive Aussie. All eyes on US NFP and Powell.
USD/JPY falls back below 146.00 amid intense risk aversion
USD/JPY slips back under 146.00, fading its recovery in the Asian session on Friday. Risk aversion remains at full steam, reviving the haven demand for the Japanese Yen as investors ditch riskier assets amid a looming global trade war-led by US President Trump's aggressive tariff policies. US NFP and Powell eyed.
Gold: Will Powell and Payrolls drive the next leg higher?
Gold price is taking a breather early Friday after witnessing a volatile trading day on Thursday. Traders are consolidating the weekly gains, slightly away from the record high of $3,168, bracing for the US Nonfarm Payrolls report and US Federal Reserve Chair Jerome Powell’s speech for a fresh directional impetus.
Solana extends decline amid upcoming $200 million unlocks
Solana declined 3% in Friday's early Asian session, impacted by an upcoming $200 million staked SOL unlock from four whale wallets, according to Arkham Intelligence. Additionally, the SEC has acknowledged Fidelity's filing to launch a Solana exchange-traded fund.
Trump’s “Liberation Day” tariffs on the way
United States (US) President Donald Trump’s self-styled “Liberation Day” has finally arrived. After four straight failures to kick off Donald Trump’s “day one” tariffs that were supposed to be implemented when President Trump assumed office 72 days ago, Trump’s team is slated to finally unveil a sweeping, lopsided package of “reciprocal” tariffs.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.