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• EUR/GBP softens to around 0.8530 in Friday’s early European session. 
• The UK Retail Sales rose 0.4% MoM in March vs. -0.4% expected.
• Investors will closely watch the US-UK trade talks as the UK Finance Minister is scheduled to meet the US Treasury Secretary on Friday.

The EUR/GBP cross loses momentum to near 0.8530 during the early European session on Friday. The Pound Sterling (GBP) strengthens against the Euro (EUR) after the stronger-than-expected UK economic data. 

Data released by the Office for National Statistics (ONS) showed on Friday that the UK Retail Sales increased 0.4% MoM in March versus a rise of 0.7% prior (revised from 1.0%). This figure came in above the market consensus of a decline of 0.4%. On an annual basis, Retail Sales jumped 2.6% in March compared to a rise of 2.2% prior, better than the estimation of 1.8%. The GBP attracts some buyers in an immediate reaction to the upbeat UK Retail Sales data. 

On the Euro’s front, the dovish remarks from the European Central Bank (ECB) policymakers drag the shared currency lower. ECB policymaker and Finnish central bank governor Olli Rehn said on Thursday that the central bank should not rule out a "larger interest rate cut". Meanwhile, ECB Governing Council member Madis Muller said on Wednesday that the central bank may have to lower interest rates to levels that stimulate the economy if trade uncertainty proves more damaging to growth. 

Investors will closely monitor the developments surrounding the US-UK trade talks. UK Finance Minister Rachel Reeves is scheduled to meet US Treasury Secretary Scott Bessent on Friday. High on the agenda will be a possible trade deal, which Britain hopes will reduce the hit from Trump's import tariffs to its exporters of goods, including cars and steel. Reeves said on Thursday she was confident Britain could reach a trade deal with the US. However, the lack of clarity of trade policy could weigh on the GBP and create a tailwind for EUR/GBP. 

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