- The EUR/GBP is stabilized above 0.8530 while traders monitor the policy of central banks and economic growth prospects.
- The strength of the euro depends on the prospects of a commercial agreement between the European Union and the United States.
- The Bank of England remains cautious before the rate of fees on August 1.
The euro (EUR) remains stable in front of the sterling pound (GBP) on Thursday while the markets continue to monitor the comments of the central banks and economic resilience.
At the time of writing, the EUR/GBP is quoted about 0.8533 while the commercial conversations between the European Union (EU) and the United States (USA) take center stage.
Negotiations in Brussels are being observed closely by the markets, especially with German Chancellor Friedrich Merz and the president of the European Commission, Ursula von der Leyen, pressing for an advance.
With the markets by digesting the comments of the Governor of the Bank of England (BOE), Andrew Bailey, the euro currently depends on the perspectives of a favorable trade agreement with the US.
The governor of the Bank of England, Bailey, offers dovish comments for the next policy decision
At a conference organized by the British Chambers of Commerce, the governor of the Bank of England, Andrew Bailey, commented on the current economic conditions in the United Kingdom.
One of his comments included that, “in recent months, the evidence that a margin of maneuver is opening has been strengthened, especially in the labor market.”
These comments reflect a moderate tone, adding to the expectations that the BOE He could continue cutting up rates in the coming months.
However, previous data showed a slight improvement in the United Kingdom’s business activity, with the preliminary compound PMI of S&P global up to 50.7 in June, from 50.3 in May. Published on Monday, the reading exceeded the forecasts and highlighted the strongest growth of the services sector in three months, exceeding the activity in Germany and France.
The European Union presses by a commercial agreement with the United States
Meanwhile, for the largest economy in Europe, Germany, the approach remains in the prospects of a commercial agreement with the United States, which has exerted immense pressure on the German economy.
On Thursday, Growth from Knowledge published the latest GFK consumer confidence survey in Germany for Julio. The report, considered a leading economic indicator, showed that confidence in Germany is decreasing. Julio’s reading was expected to be at -19.3, which already reflects confidence in decrease. Instead, the real figures showed that confidence for Julio fell to -20.3.
A great obstacle to Germany and the European Union (EU) have been the tariffs imposed on global nations in the United States.
The high tariffs imposed by the US on the “Day of Liberation” have exerted immense pressure on countries that depend on exports of industrial goods. Currently, global business partners face a 10% base tariff in all imports to the US, with a higher tariff on EU imports scheduled to enter into force on July 9.
The EU is striving to reach an agreement with the US that is mutually beneficial. The ability to do so, or at least reduce high tariffs on steel, aluminum and auto parts, could provide some relief to the European economy.
EUR/GBP pause in search of direction above 0.8530
The EUR/GBP daily graph shows the price consolidating itself near the Fibonacci recoil level of 50.0% of the March-April Rally, currently at 0.8527.
This level marks a key medium point of the recent bullish leg and provides a short -term directional context. The pair is still supported above the single mobile average (SMA) of 50 days at 0.8477, with the 100 -day SMA at 0.8433 also in sight.
The upward objectives remain at the 61.8% recoil level (0.86044) and the maximum of April in 0.8738, while the downward risks could accelerate if the torque falls below 0.8518, exposing 0.8477 and 0.8433.
The momentum remains slightly bullish, with the relative force index (RSI) in 60, just below the overcompra territory.
EUR/GBP daily graphics
FAQS tariffs
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
(This story was corrected on June 26 at 14:50 GMT to say at the first point that is EUR/GBP, no Eur/usd)
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
