EUR/GBP Steady Near 0.8650 Ahead of Eurozone Retail Sales, Supported by Strong German Data

EUR/GBP Holds Firm Near 0.8650 on German Data Boost, UK Fiscal Woes

Euro Supported by German Industrial Recovery

The EUR/GBP currency pair continues to trade with a firm tone near 0.8650 on Monday, underpinned by better-than-expected German industrial production and cautious sentiment around the British Pound. The pair extended its rebound for the second consecutive session, with markets awaiting Eurozone Retail Sales data for fresh momentum.

Germany’s industrial output rose 1.2% MoM in May, beating expectations for a flat reading. The upbeat data signals a modest rebound in the manufacturing sector, following a downwardly revised 1.6% decline in April. On an annual basis, production climbed 1.0%, further strengthening Euro demand in the short term.

Pound Under Pressure Amid UK Fiscal Concerns

The British Pound (GBP) is weighed down by renewed fears over the UK's fiscal trajectory, as growing debt levels and political instability erode investor confidence. These concerns have tempered GBP demand despite no major economic releases out of the UK today.

EU and US Eye Trade Deal Before Tariff Deadline

Meanwhile, the European Commission is reportedly progressing toward a deal with the US to prevent the re-introduction of Trump-era tariffs, with July 9 set as a soft deadline. Bloomberg noted that EU automakers may support tariff relief in exchange for increased investments in the US.

Key Levels to Watch:

• Resistance: 0.8675
• Support: 0.8610
• Catalyst: Eurozone Retail Sales data (later today)

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