Monday, June 23, 2025 4:50 AM EDT
Image Source: Unsplash
- EUR/GBP strengthens to around 0.8570 in Monday’s early European session.
- Weaker-than-expected UK Retail Sales continue to undermine the Pound Sterling and create a tailwind for the cross.
- The ECB signaled a pause in rate cuts despite low inflation.
The EUR/GBP cross trades in positive territory near 0.8570 during the early European trading hours on Monday. The Pound Sterling (GBP) weakens against the Euro (EUR) as UK Retail Sales declined more than expected in May. Traders will keep an eye on the preliminary reading of the Purchasing Managers Index (PMI) for June from the Eurozone and the United Kingdom, which will be released later on Monday.
The Bank of England (BoE) decided to keep rates at 4.25% at its June policy meeting last week, as widely expected. BoE Governor Andrew Bailey said that interest rates remain on a gradual downward path but warned, "The world is highly unpredictable.” The downbeat UK Retail Sales might encourage traders to raise their bets for further rate cuts by the BoE, which might drag the GBP lower.
Economists polled by Reuters widely expect BOE policymakers to cut rates by 25 basis points (bps) at the next gathering in August and to reduce another 25 bps in the fourth quarter.
On the Euro front, the European Central Bank (ECB) signaled a pause in policy easing this month despite projections showing price growth dropping below its 2% target. This, in turn, could provide some support to the shared currency.
ECB Francois Villeroy de Galhau said on Thursday that the central bank would monitor the situation for signs of a spillover from energy prices into underlying inflation and broader price expectations, which could prompt it to adapt monetary policy accordingly.
More By This Author:
WTI Drifts Higher To Near $73.00 On Rising Israel-Iran Tension USD/CAD Gathers Strength To Near 1.3700 As Fed Holds Rate Steady WTI Extends Upside Above $70.50 Ahead Of US Retail Sales Release
Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any ...
more
Disclaimer: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any particular user's investment objectives, financial situation, or means. ING forms part of ING Group (being for this purpose ING Group NV and its subsidiary and affiliated companies). The information in the publication is not an investment recommendation and it is not investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Reasonable care has been taken to ensure that this publication is not untrue or misleading when published, but ING does not represent that it is accurate or complete. ING does not accept any liability for any direct, indirect or consequential loss arising from any use of this publication. Unless otherwise stated, any views, forecasts, or estimates are solely those of the author(s), as of the date of the publication and are subject to change without notice.
The distribution of this publication may be restricted by law or regulation in different jurisdictions and persons into whose possession this publication comes should inform themselves about, and observe, such restrictions.
Copyright and database rights protection exists in this report and it may not be reproduced, distributed or published by any person for any purpose without the prior express consent of ING. All rights are reserved. ING Bank N.V. is authorised by the Dutch Central Bank and supervised by the European Central Bank (ECB), the Dutch Central Bank (DNB) and the Dutch Authority for the Financial Markets (AFM). ING Bank N.V. is incorporated in the Netherlands (Trade Register no. 33031431 Amsterdam). In the United Kingdom this information is approved and/or communicated by ING Bank N.V., London Branch. ING Bank N.V., London Branch is deemed authorised by the Prudential Regulation Authority and is subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. The nature and extent of consumer protections may differ from those for firms based in the UK. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.. ING Bank N.V., London branch is registered in England (Registration number BR000341) at 8-10 Moorgate, London EC2 6DA. For US Investors: Any person wishing to discuss this report or effect transactions in any security discussed herein should contact ING Financial Markets LLC, which is a member of the NYSE, FINRA and SIPC and part of ING, and which has accepted responsibility for the distribution of this report in the United States under applicable requirements.
less
How did you like this article? Let us know so we can better customize your reading experience.
