- EUR/GBP stays below the key 0.8400 level as traders await Eurozone sentiment data and ECB commentary.
- The British Pound finds support from strong CPI and Retail Sales figures.
The Euro (EUR) struggled to gain sustained momentum against the British Pound (GBP) on Monday, despite an early rebound from last week’s losses. The announcement by US President Donald Trump to delay tariffs on European imports until July 9 provided some support to the Euro, helping EUR/GBP limit its downside. However, the pair remained capped below the key 0.8400 level as the Pound continued to benefit from solid UK economic fundamentals and stable inflation expectations.
Trump had initially threatened a broad 50% tariff on EU goods but extended the deadline after a call with European Commission President Ursula von der Leyen, who affirmed Europe’s readiness to advance trade talks swiftly and decisively. Comments from European Central Bank (ECB) President Christine Lagarde also helped stem further losses for the Euro. Lagarde stressed the importance of strengthening the Euro’s international role amid rising geopolitical and economic uncertainties, noting that this requires building trust through deeper capital markets, stronger institutions, and a firm commitment to economic security.
Despite these positive developments, EUR/GBP remained constrained below 0.8400 as the British Pound drew ongoing support from robust domestic data and relatively steady inflation expectations.
Looking ahead, EUR/GBP traders are focused on Tuesday’s release of key Eurozone sentiment indicators for May, including Business Climate, Consumer Confidence, Economic Sentiment, Industrial Confidence, and Services Sentiment. These reports will provide important insights into how businesses and consumers view the economic outlook across the region.
For the EUR/GBP pair, the upcoming data could be crucial in determining whether the Euro can maintain its recent gains against the Pound. Stronger-than-expected sentiment readings may boost confidence in the Eurozone’s economic resilience, potentially delaying further ECB rate cuts and strengthening the Euro. Conversely, weaker sentiment figures could weigh on the Euro, especially if ECB policymakers like Klaas Knot and Joachim Nagel adopt a dovish stance in their upcoming remarks. In this scenario, the Pound is likely to regain the upper hand, supported by firmer UK fundamentals.
