EUR/GBP is showing strength near 0.8490 in the early European session on Tuesday. The Euro is gaining momentum following the first round of French elections, where Marine Le Pen’s far-right National Rally (RN) party emerged as a frontrunner but fell short of an outright majority. Investors are also keeping an eye on the UK Parliamentary elections scheduled for Thursday.
The Eurozone Harmonized Index of Consumer Prices (HICP) data for June is set to be released on Tuesday, adding to market anticipation. The Eurozone economy remains in focus as political developments in France and the UK continue to influence currency movements.
In France, President Emmanuel Macron’s centrist alliance faced losses in the first round of parliamentary elections, while the left-wing coalition of the New Popular Front (NFP) made significant gains. Despite the RN’s strong showing, it may not secure the 289 seats needed for an absolute majority, which is supporting the Euro against the Pound Sterling.
On the other hand, uncertainty looms over the Bank of England’s (BoE) interest rate decision and the outcome of the UK elections. The GBP is weakening as investors await clarity on the BoE’s monetary policy stance and the potential shift in UK leadership.
Overall, the Euro’s performance against the Pound Sterling is closely tied to political events in France and the UK, as well as economic data releases that can impact currency movements. Traders will continue to monitor developments in both countries to gauge the direction of the EUR/GBP cross.