The EUR/GBP pair is experiencing a decline, currently trading in the 0.8440s. The Euro is facing political risks ahead of the French elections on Sunday, with concerns about a potential far-right victory impacting its value. In contrast, the Pound Sterling is receiving support from strong Retail Sales data in the UK. This has lessened expectations for a rate cut by the Bank of England in August.
The upcoming French elections on June 30 have raised fears of a National Rally (RN) victory, which could have significant implications for the European Union and global alliances. The German IFO Business Climate Index also fell below expectations, adding to the downward pressure on the Euro.
On the other hand, the Pound Sterling saw a boost from better-than-expected Retail Sales data, which reduced speculation of a rate cut by the Bank of England. Despite previous dovish signals from the BoE’s June meeting, the latest data suggests a more balanced outlook. Overall, market trends indicate a cautious approach towards both currencies in light of political and economic uncertainties.