The EU is expected to reach a US tariff agreement to boost the euro, and the pound is waiting for UK GDP data. EUR/GBP rises modestly
2025-07-10 15:37:06
The EU's "exemption" expectations helped the euro strengthen modestly
In early trading on Thursday, EUR/GBP rose slightly to around 0.8625. The market is optimistic that the tariff negotiations between the EU and the US are expected to "reach an agreement within a few days" to avoid the Trump administration imposing import tariffs of more than 10% on EU goods.
Trump previously said that the EU's "attitude has softened" and hinted that the EU will be formally notified of new tariff rates on Thursday. This statement was interpreted by the market as the possibility of reaching a compromise, thus boosting the euro's short-term performance.
A foreign exchange strategist pointed out: "If the EU obtains 'exceptional treatment', it will enhance the market's confidence in the stability of the eurozone's trade environment and support the euro's short-term rebound."
UK economic growth data key to pound's performance
The focus has now shifted to the UK GDP data for May, which will be released on Friday. The market expects the data to increase by 0.1% month-on-month, compared with a decrease of 0.3% in the previous period. If the data is better than expected, it may dampen the market's bets on the Bank of England to cut interest rates in August.
Bank of England Governor Andrew Bailey previously said that interest rates "will show a gradually downward path in the future", which has led to market expectations that the bank will cut interest rates from 4.25% to 4.00% in August.
An analyst from a local British institution said: "Unless GDP data is significantly better than expected, the Bank of England will continue to advance the easing cycle."
The euro against the pound received mild buying support near 0.8625, and the short-term trend showed a strong shock pattern. From a technical point of view, if the 0.8600 support level is maintained, it is expected to test the short-term resistance of the 0.8660-0.8675 range in the future.
On the other hand, if the UK GDP data is strong and pushes up the pound, the EUR/GBP may retest the downside support range of 0.8580 or even 0.8550.
Editor's opinion:
The euro is currently benefiting from positive expectations for the prospects of negotiations between Europe and the United States, but whether this optimism can continue still depends on whether Trump formally lowers tariffs on EU goods.
On the other hand, the pound is at the critical point of "data determines policy": if the UK GDP rebounds less than expected, it will further confirm the Bank of England's interest rate cut path. Look at EUR/GBP from a range perspective and pay attention to the breakthrough of the 0.8600-0.8660 range.
In early trading on Thursday, EUR/GBP rose slightly to around 0.8625. The market is optimistic that the tariff negotiations between the EU and the US are expected to "reach an agreement within a few days" to avoid the Trump administration imposing import tariffs of more than 10% on EU goods.
Trump previously said that the EU's "attitude has softened" and hinted that the EU will be formally notified of new tariff rates on Thursday. This statement was interpreted by the market as the possibility of reaching a compromise, thus boosting the euro's short-term performance.
A foreign exchange strategist pointed out: "If the EU obtains 'exceptional treatment', it will enhance the market's confidence in the stability of the eurozone's trade environment and support the euro's short-term rebound."
UK economic growth data key to pound's performance
The focus has now shifted to the UK GDP data for May, which will be released on Friday. The market expects the data to increase by 0.1% month-on-month, compared with a decrease of 0.3% in the previous period. If the data is better than expected, it may dampen the market's bets on the Bank of England to cut interest rates in August.
Bank of England Governor Andrew Bailey previously said that interest rates "will show a gradually downward path in the future", which has led to market expectations that the bank will cut interest rates from 4.25% to 4.00% in August.
An analyst from a local British institution said: "Unless GDP data is significantly better than expected, the Bank of England will continue to advance the easing cycle."
The euro against the pound received mild buying support near 0.8625, and the short-term trend showed a strong shock pattern. From a technical point of view, if the 0.8600 support level is maintained, it is expected to test the short-term resistance of the 0.8660-0.8675 range in the future.
On the other hand, if the UK GDP data is strong and pushes up the pound, the EUR/GBP may retest the downside support range of 0.8580 or even 0.8550.
Editor's opinion:
The euro is currently benefiting from positive expectations for the prospects of negotiations between Europe and the United States, but whether this optimism can continue still depends on whether Trump formally lowers tariffs on EU goods.
On the other hand, the pound is at the critical point of "data determines policy": if the UK GDP rebounds less than expected, it will further confirm the Bank of England's interest rate cut path. Look at EUR/GBP from a range perspective and pay attention to the breakthrough of the 0.8600-0.8660 range.
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