EUR/GBP Continues to Rise Above 0.8550 Ahead of Eurozone Retail Sales Report

The EUR/GBP cross continues its rally near 0.8575 during the early European session on Tuesday. This uptick in the Euro (EUR) is supported by recent positive German economic data. Traders are awaiting further insights from the Eurozone June Retail Sales report, scheduled for later today.

The Euro's advance is also fueled by stronger-than-expected German Factory Orders. According to data from the Federal Statistics Office, Factory Orders surged 3.9% MoM in June, reversing a 1.6% decline in May. This figure exceeded the market consensus of 0.8%.

The Eurozone’s June Retail Sales are anticipated to rise by 0.1% YoY. An improvement in retail performance could boost the Euro (EUR) against the Pound Sterling (GBP). Conversely, a weaker result might prompt the European Central Bank (ECB) to consider interest rate cuts in September, potentially dragging the shared currency lower.

Regarding the GBP, the Bank of England (BoE) recently reduced its interest rate by 25 basis points (bps) to 5%. BoE Governor Andrew Bailey indicated that future rate decisions will be made on a meeting-by-meeting basis. However, market expectations suggest that the BoE may implement additional rate cuts in September, with a nearly 55% probability of a move at the next meeting.

Paraphrasing text from "FX Street" all rights reserved by the original author.