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EUR/GBP moves above 0.8450 on improving German trade balance

  • EUR/GBP gains ground as German trade balance rises to €24.9 billion in May.
  • The Euro could struggle due to political uncertainty in France.
  • The British Pound could limit its fall due to positive sentiment following the overwhelming victory of the Labour Party.

EUR/GBP is up slightly to near 0.8460 during the early European session on Monday. This increase could be attributed to the German trade balance, which beat expectations. The trade surplus increased to €24.9 billion in May, beating market expectations of €20.3 billion and the previous reading of €22.2 billion (revised from €22.1 billion).

However, political uncertainty in France following the second round of parliamentary elections on Sunday put some selling pressure on the Euro (EUR), which could limit the EUR/GBP pair’s upside. According to The Economist, exit polls indicated that the Popular Left Front (NFP), led by Jean-Luc Mélenchon, is on track to win the majority of seats, having secured at least 174 seats.

Meanwhile, CNBC reported that Deutsche Bank strategists said: “Trying to form a government that has any kind of stability looks like a very difficult task this morning. Political paralysis over the next 12 months seems the most likely outcome.” They believe markets will be wary of the NFP’s “fiscally aggressive” spending and taxation plans.

In the United Kingdom (UK), the British Pound (GBP) is supported by positive sentiment following the landslide victory of the Labour Party in the 2024 general election. The Labour Party won 410 seats, a significant increase of 212 seats from the 2019 election.

In the absence of any high-priority UK data, traders are likely to focus on the BRC’s comparable retail sales releases on Tuesday and gross domestic product figures on Thursday. These data could provide fresh insights into British economic conditions.

Euro PRICE Today

The table below shows the exchange rate of the Euro (EUR) against major currencies today. The Euro was the strongest currency against the Japanese Yen.

USD EUR GBP JPY CAD AUD NZD CHF
USD -0.02% -0.03% 0.10% -0.12% 0.13% -0.04% -0.06%
EUR 0.02% 0.19% 0.45% 0.22% 0.30% 0.31% 0.29%
GBP 0.03% -0.19% 0.23% 0.05% 0.11% 0.12% 0.09%
JPY -0.10% -0.45% -0.23% -0.21% 0.05% 0.02% -0.10%
CAD 0.12% -0.22% -0.05% 0.21% 0.20% 0.07% 0.07%
AUD -0.13% -0.30% -0.11% -0.05% -0.20% 0.00% -0.02%
NZD 0.04% -0.31% -0.12% -0.02% -0.07% -0.01% -0.02%
CHF 0.06% -0.29% -0.09% 0.10% -0.07% 0.02% 0.02%

The heatmap shows percentage changes of major currencies. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you choose the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change shown in the chart will represent EUR (base)/USD (quote).

Source: Fx Street

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