Euro remains depressed against British Pound despite positive Eurozone data

EUR/GBP drifts back from 0.8575 highs and approaches one-year lows at 0.8546.
A string of fairly positive Eurozone releases has failed to support the Euro.
The British Pound has been unaffected by the weak UK construction activity figures.

Guillermo Alcala FXStreet

The Euro (EUR) remains depressed near one-year lows against the British Pound (GBP) on Monday, hitting session lows below 0.8560 after pulling back from Friday’s highs at 0.8575. A string of rather positive Eurozone figures has failed to provide any significant support, while the Pound remains moderately bid despite weak UK construction figures.

Eurozone Retail Sales have picked up 0.2% in May, slightly below the 0.3% market consensus but above the 0.3% contraction seen in April. Year-over-year (Y-o-Y), consumption accelerated to 1.6%, as expected, up from April’s 1% reading.

Before that, German Factory Orders figures beat expectations with a 1.9% increase in May, well above the 1.2% increase expected, partially reversing the 3.2% contraction seen in April. The Sentix Investors’ Confidence Index for July improved to -3.1, from -13.4 in June, reaching its best reading in the last four months.

In the UK, May’s S&P Global Construction Purchasing Managers Index (PMI) figures revealed a weaker-than-expected improvement in the sector’s business activity. The Index improved to 38.4 from 38.2 in the previous month, yet remained well below the 40.0 reading anticipated by market consensus.

The Pound remains fairly steady amid the UK’s political uncertainty as the market braces for the seventh prime minister in the last 10 years. Andy Burnham, the Mayor of Manchester and the best-positioned to replace the previous PM, Keith Starmer, has vowed to respect the fiscal rules, which is keeping Pound’s bears in check for now.

Economic Indicator

Factory Orders s.a. (MoM)

The Factory orders released by the Deutsche Bundesbank is an indicator that includes shipments, inventories, and new and unfilled orders. An increase in the factory order total may indicate an expansion in the German economy and could be an inflationary factor. It is worth noting that the German Factory barely influences, either positively or negatively, the total Eurozone GDP. A high reading is positive (or bullish) for the EUR, while a low reading is negative.

Economic Indicator

Retail Sales (MoM)

The Retail Sales data, released by Eurostat on a monthly basis, measures the volume of retail sales in the Eurozone. It shows the performance of the retail sector in the short term, which accounts for around 5% of the total value added of the Eurozone economies. Retail Sales data is widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the MoM reading comparing sales volumes in the reference month with the prior month. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish

AUD/USD consolidates above 0.6950 amid risk aversion

AUD/USD consolidates in the Asian session on Thursday, trading just above 0.6950 as traders assess developments in the Middle East crisis. The Pentagon reportedly ordered readiness for potential strikes against Iran. This keeps the geopolitical risk premium in play, which, along with hawkish FOMC Minutes and elevated US bond yields, will likely keep the US Dollar underpinned at the expense of the pair.

USD/JPY slips below 158.00 as USD retreats

USD/JPY returns to the red below 158.00 in the Asian session on Thursday amid speculation that authorities will step in to prop up the Japanese Yen. Meanwhile, the US Dollar eases from near an 18-month high on profit taking, ignoring Wednesday's hawkish FOMC Minutes and the risk of a further escalation of tensions in the Middle East, adding to the pair's pullback.

Gold rebounds from two-month lows; will it sustain?

Gold is bouncing back toward $4,150 early Thursday after defending $4,100 on Wednesday. US Dollar retreats on profit-taking, despite high Treasury yields and hawkish Fed Minutes. Risks remain skewed to the downside for Gold while RSI stays bearish.

Cryptocurrencies face new security risk as Ethereum researcher warns of potential ECDSA break

Ethereum (ETH) researcher Justin Drake has urged the crypto industry to begin preparing for a potential breakthrough that could undermine the cryptographic systems securing digital assets. In an X post on Wednesday, Drake called on the industry to calmly enter what he described as “bunker mode.”

The Fed trap is tightening

Gold is getting punched in the mouth again today. And if you’ve been following this bull market for any length of time, you know that’s not necessarily a bad thing. In fact, it may be giving us exactly the opportunity we’ve been waiting for.

The UK 30-year gilt just hit a 1998 high. Is that good or bad for the British Pound?

The yield on the UK's 30-year government bond, or gilt, went through 6% on October 1 for the first time since early 1998, and on Monday the Pound was at its strongest against the Euro since June 2025. The gilt market's 28-year high is mostly someone else's. Since early May, the 30-year gilt yield has risen about 0.15 of a percentage point and the US 30-year about 0.7.