EUR/GBP is on a losing streak for the third consecutive session, trading around 0.8410 during European hours on Friday. The Pound Sterling is showing strength against major currencies due to stable political conditions in the UK following the victory of Keir Starmer’s Labour Party in parliamentary elections.
The UK economy saw unexpected growth in May, with a 0.4% expansion surpassing market expectations. This growth has reduced the likelihood of a rate cut by the Bank of England (BoE) in August. The new Chancellor, Rachel Reeves, aims to stimulate growth and investment with a focus on the supply side.
In Europe, the Euro is finding support as concerns about a French financial crisis ease. The Eurozone’s reduced expectations of consecutive rate cuts by the European Central Bank (ECB) have stabilized the Euro’s demand.
UOB Group FX analysts anticipate that the EUR/USD pair may trade within a range of 1.0845 to 1.0900, with a potential rise to 1.0915 in the short term. The Euro is the currency for 20 European Union countries in the Eurozone and is the second most traded currency in the world after the US Dollar. The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone and manages monetary policy to maintain price stability. Eurozone inflation data, economic indicators, and the Trade Balance are important factors that can impact the Euro’s value.