- EUR/GBP edges lower to near 0.8630 in Monday’s early European session.
- UK economic growth slowed in Q2 to 0.3%, but it was better than economists had forecast.
- Investors will closely monitor the meeting between Trump and Zelenskiy later on Monday.
The EUR/GBP cross tumbles to around 0.8630 during the early European session on Monday. The Pound Sterling (GBP) weakens against the Euro (EUR) amid the upbeat UK Gross Domestic Product (GDP) report for the second quarter (Q2). Investors await the UK July Consumer Price Index (CPI) inflation and the European Central Bank (ECB) President Christine Lagarde’s speech later on Wednesday.
The UK economy grew at a faster pace than estimated in Q2 despite the shock of US trade tariffs and a weaker jobs market. The Office for National Statistics (ONS) showed on Thursday that UK GDP slowed to 0.3% in the three months to June, down from a rate of 0.7% in Q1. This reading came in stronger than the expectation of a 0.1% expansion in the reported period. The stronger-than-expected UK GDP report could complicate the Bank of England’s (BoE) path to cutting interest rates further, which lifts the GBP against the EUR.
On the Euro front, investors will focus on a meeting between US President Donald Trump and Ukrainian leader Volodymyr Zelenskiy later on Monday as the US presses Ukraine to accept a quick peace deal to end Europe’s deadliest war in 80 years.
Russian leader Vladimir Putin agreed that the US and its European allies could offer Ukraine a security guarantee resembling NATO’s collective defense mandate as part of an eventual deal to end the war. Peace hopes imply lower energy costs and reduced geopolitical uncertainty in the Eurozone, which generally provides some support to the shared currency.
