EUR/GBP is trading lower around 0.8700 in early European hours on Wednesday, pressured by soft Eurozone data. The Euro (EUR) slipped against the Pound Sterling (GBP) after disappointing Eurozone PMI figures. Traders now focus on June’s Eurozone Retail Sales report, due later in the day.
Germany’s Federal Statistics Office reported a surprise decline in factory orders for June, signaling continued weakness in the manufacturing sector. The lackluster data, coupled with sluggish Eurozone growth, may push the European Central Bank (ECB) to remain cautious about further rate cuts.
The final HCOB Eurozone Composite PMI for July fell to 50.9 from June’s 51.0, missing market expectations. Similarly, Services PMI eased to 51.0 in July, below the 51.2 forecast.
Meanwhile, uncertainty lingers over EU-US trade negotiations. The EU has delayed its planned countermeasures against US tariffs for six months, but any fresh tensions could weigh on the Euro.
Looking ahead, all eyes are on Thursday’s Bank of England (BoE) policy decision. The BoE is widely expected to cut its base rate by 25 basis points to 4.00%, marking its third reduction of 2025. Markets have priced in over an 80% chance of a rate cut this week and are anticipating another quarter-point cut later this year, according to Reuters.
